Dangers of hosting your own Eth2 node, explained

Hosting an Eth2 node is a big responsibility — and if things go wrong, this could result in some painful penalties.

How does a hosting provider tackle the dangers of running your own node?

Allnodes can offer an affordable alternative to doing everything yourself, reducing the risks of financial penalties and slashing.

The company offers an intuitive user interface, and two easy-to-understand hosting plans to ensure that customers can make an informed decision. This is coupled with support teams who are online 24/7, all year round, and free node maintenance with instant and unlimited upgrades.

Validator keys are given multi-level protection to prevent them from being stolen and lost, and all of this is achieved while ensuring that only users have access to their funds. Nodes are monitored for free — with dedicated bots providing regular Telegram and Discord alerts.

But as we mentioned earlier, uninterrupted uptime is the most important thing to look for in a hosting provider. As a result, Allnodes provides enterprise-grade infrastructure — with a guaranteed 99.90% service-level agreement in place.

Staking on Eth2 doesn’t have to be a daunting experience — and with the right tools, even those who aren’t technically minded can enjoy the perks of running their very own node… without the hassle.

Learn more about Allnodes

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

What are the alternatives to hosting your own node?

Companies exist that specialize in validator node hosting — and better still, they can be non-custodial, meaning they have no access to user wallets.

Platforms such as Allnodes provide masternodes, full nodes and staking services for dozens of different blockchains — and have now rolled out support for Ethereum 2.0.

This brand launched in October 2018 when CEO Konstantin Boyko-Romanovsky realized just how difficult it is to host a masternode given the technical expertise required — not to mention the sophisticated hardware and uninterrupted bandwidth that’s needed too.

Allnodes says it now hosts more than 8,400 nodes on behalf of its customers with a value in excess of $130 million — commanding an overall masternodes market share of 13.1%.

Instead of getting bogged down in endless technical manuals, the company aims to handle behind-the-scenes operations so crypto enthusiasts can focus on other things. The registration can be completed in just a few simple steps.

Are there any other risks that you should be aware of?

Keeping validator keys secure is essential, as they can be lost or damaged.

Eth2 validators who run their own node run the risk of losing their keys, forgetting the password, or damaging the hardware where the keys are stored. In some cases, the hardware may have been physically damaged — but it’s also possible for crucial data to be lost as a result of a technical fault.

And yes, all of this can result in some more financial penalties — this time for inactivity. Instead of block rewards being reduced, this could result in an ETH stake being permanently slashed.

Security needs to be at the forefront of every single person who wishes to become a node operator. Validator keys can also be stolen by someone who manages to gain access to the computer or remote location where the node is being hosted. Messages can end up being double-signed — seemingly on your behalf — or a malicious actor could attempt to compromise the network with inaccurate data.

If the security of your node is compromised, it’s possible that it could be a year or two before you regain access.

What happens if the uptime of your node is interrupted?

You could end up being penalized, eliminating any financial reward from operating a node.

It’s worth bearing in mind that you risk being penalized even if the circumstances were outside of your control. A dodgy internet connection — something that’s commonplace for many of us living in residential areas — could result in a slashing event occurring. Given how these outages can be caused by everything from bad weather to water damage and road repairs, relying on the infrastructure you’ve got at home isn’t necessarily the best idea.

As a result, many of the people who want to operate their own node have decided to pay for an external hosting provider, where they have a greater chance of receiving the type of uptime they need to be regarded as a trustworthy validator. But again, even this approach isn’t without potential pitfalls. Selecting a hosting provider that can’t guarantee continual service could trigger financial losses, and you may not be eligible for compensation as such downtime is often factored into the terms of service.

If you are going to opt for an external hosting provider, it’s crucial to read legitimate reviews — helping you to form an opinion about whether the company is reputable. Finally, always remember that market-leading solutions may not be the best course of action for hosting a node. In November, an Amazon Web Services outage affected countless thousands of websites, including the likes of Coinbase, and such an event would have hurt Eth2 node operators too.

Is this an easy thing to do without any technical knowledge?

Operating an Eth2 node can get quite complicated — and wading into this commitment without knowing how things work can result in some costly mistakes.

Even if an inexperienced validator makes some innocent mistakes, some of the 32 ETH they have staked can end up being taken away from them if they have been seen to work against the best interests of the network. Should 50% of this 32 ETH be deducted, their node will be automatically ejected from participating any further. Given how this would equate to a loss of about $9,500 at current rates, this is best to be avoided.

The problems don’t end here, though. Fully understanding the inner workings of Eth2 can be an uphill struggle to say the least. As the old saying goes, time is money, and you could argue that the effort involved in getting up to speed with this new PoS blockchain may not be worth the hassle given the rise of staking-as-a-service providers.

What does hosting your own Eth2 node involve?

It means that you’ll become a validator for the newly upgraded Ethereum blockchain — and be responsible for verifying transactions and maintaining the network.

The genesis block of Eth2 launched on Dec. 1, paving the way for long-awaited improvements to the network’s security and scalability. This will involve a shift to a proof-of-stake consensus mechanism, which is regarded as more eco-friendly and eliminates the need for miners.

More than 16,000 validators transferred 524,288 ETH into a deposit contract before a deadline of Nov. 24, paving the way for “Phase 0” to launch a week later. The total value of deposits has grown even further since.

Participants are not going to be able to withdraw this ETH until the current Ethereum mainnet “docks” with this new blockchain — a process that could take several years.

Those who host their own node have had to stake a minimum of 32 ETH (worth about $19,000 at the time of writing.) There are also other costs to consider too, such as gas costs and the expense of finding a reliable hosting provider.

That’s a lot of money to have lying around. In exchange for becoming a validator, they’ll receive rewards for contributing to the upkeep of the network — but with these perks comes responsibility.

The challenges of Eth2 staking, explained

Eth2 staking has its downsides — people may not have the means to contribute 32 ETH, or the technical knowhow to run a node. Can these issues be solved?

How does this ecosystem work?

There are three key roles within the Stkr ecosystem.

Providers deliver the computing resources that drive the Eth2 nodes — and they pay insurance that acts as a guarantee against poor hardware performance. These funds will be used to compensate stakers if there is an outage, but providers also stand to gain rewards if their infrastructure runs without a hitch. By building a good reputation, they are prioritized whenever new staking funds need to be allocated.

Requesters, otherwise known as stakers, are those who want to lock up their ETH without hosting a node themselves. In time, governors will be responsible for deciding the future direction of Stkr through votes and will be incentivized to work in the platform’s best interests.

Every now and again in the crypto world, trends begin to form. We’ve had the rise of ERC-20 tokens, nonfungible tokens, and DeFi too. In the coming months, attention is going to shift to Ethereum 2.0 as the launch of the world’s biggest proof-of-stake network draws closer. Platforms that allow people from all backgrounds to get involved in staking will be a crucial part of this newly formed ecosystem.

How can Eth2 staking be made more accessible for everyone?

Staking platforms are emerging that help address some of the limitations currently provided by Eth2.

These services can simplify the process of getting involved in Eth2 — and open up opportunities to those who may have a smaller amount of ETH to stake.

However, it’s important for crypto enthusiasts to do their due diligence about these staking services to ensure that their cryptocurrency will remain safe.

Platforms such as Stkr, built by Ankr, to allow anyone to stake in a validator node, with a minimum requirement of just 0.5 ETH. This is 64 times smaller than the contributions that needed to be made to the deposit contract — opening up opportunities to more people. Stkr then brings these funds together in the form of Micropools and allocates them to real-life Eth2 nodes.

Another feature of Stkr that’s likely to bring mass appeal to the world of Eth2 staking is the fact that users receive a synthetic token known as aETH in exchange for the Ether they lock up. These tokens can be used in DeFi applications — or sold at any time.

There can also be advantages for those who have greater amounts of crypto to stake. An unlimited one-click deposit limit means that high net worth users can gain exposure to the next iteration of Ethereum’s mainnet without having to operate their own nodes. Stkr also claims that this approach eliminates the risk of a stake being lost in the event that a node performs poorly.

Can anyone get involved in staking on Ethereum 2.0?

Because of the limitations set by the deposit contract… not really.

Figures from Etherscan show that there are now more than 126 million unique Ethereum addresses, and 113.6 million ETH currently in circulation. This means that, at present, it’s impossible for every single address to own one whole ETH.

Back in April, research from Adam Cochran showed that 17% of ETH was held by just 10 addresses — and the top 10,000 addresses hold about 94% of the cryptocurrency’s circulating supply. On the face of it, these statistics make it seem unlikely that your average crypto enthusiast has enough ETH lying around to start staking — and mathematically impossible that everyone who’s interested in staking will have 32 ETH.

But there are other barriers to entry that need to be tackled, too. Even those who have 32 ETH to stake may be concerned about how their assets are going to be illiquid for a prolonged period of time. Setting up and maintaining a validator node can also be a complicated business. Although someone may be interested in receiving staking rewards, they may lack the technical knowhow or time to do this themselves.

What are the downsides for participants in the beacon chain?

Right now, staking ETH is a significant, long-term commitment.

The minimum amount that someone was able to contribute into the deposit contract was 32 ETH — and at one point in November, that was worth an eye-watering $19,877.

These funds are going to be locked until the current mainnet “docks” with the beacon chain. At present, estimates suggest that this milestone may only be reached in 2022, meaning that aspiring validators may have to wait some time until they get their funds back.

One of the biggest downsides with the transition to Eth2 is how this takes a lot of commitment from the thousands of validators who have put their crypto where their mouths are. It’s a leap of faith — not least because several other key milestones related to this project have been hit behind schedule. Should further complications arise, there’s a chance that it could be years before the deposited ETH is released from the one-way contract, and its cash value may have fallen by then.

Serving as a validator also comes with responsibilities… and risks. “Slashing” means that nodes can be penalized for failing to act in the network’s best interests — as a result, there’s a real risk that staking could cause someone to lose crypto instead of earn it. Accidentally waving through an invalid transaction or falling offline can have huge consequences.

Remind me… what does Eth2 staking involve?

This is where someone deposits 32 ETH in order to become a validator in Ethereum 2.0.

The blockchain recently hit a big milestone when enough ETH was transferred into a deposit contract to trigger the launch of the new beacon chain.

Otherwise known as Phase 0 of Ethereum’s ambitious move to a proof-of-stake consensus mechanism, a staggering 524,288 ETH needed to be deposited for the launch to take place.

In 2021, shard chains are going to be deployed — allowing Ethereum to process a greater number of transactions per second. This upgrade has been desperately needed for a while, with network fees recently reaching unprecedented highs due to the popularity of DeFi.

Once the transition to PoS is complete, miners will no longer be involved in verifying transactions. Instead, validators who stake Ether will be responsible for adding blocks to the blockchain, and they’ll receive brand-new ETH as a reward. It’s hoped that this method will be far less energy intensive than proof-of-work.

Crypto cross-border payments, explained

What are the main advantages that crypto can offer when making cross-border payments, and what are the main challenges for consumers?

How can you easily, securely store and exchange cryptocurrencies?

By using a platform that has a carefully cultivated reputation for keeping digital assets safe.

Crypto platforms are emerging that aim to make cross-border payments far less expensive than what many of us are accustomed to.

One of them is Changelly PRO. The company firmly believes that cryptocurrencies offer far greater levels of transparency than traditional financial institutions, and this will help instill confidence among consumers. Dozens of trading pairs are offered across the world’s biggest digital assets.

The platform is aiming to level the playing field by offering zero deposit fees, as well as competitive fees when funds are withdrawn from an account. This is coupled with an easy-to-use, intuitive interface — and 24/7 support for users around the world. Changelly PRO says its priority is making crypto simple, and offering cutting-edge solutions that beginner and professional traders alike will find advantageous. 

Education is another area that Changelly PRO is hoping to address. To ensure that newcomers can get the most out of the service, in-depth learning materials cover everything from setting up an account to keeping it secure.

In September, the platform unveiled a brand-new iOS app for iPhones, giving users the freedom to complete transactions while on the move. This will also prove advantageous for those who don’t use a computer.

With demand for remittances unlikely to subside, crypto-focused platforms are likely to play an instrumental role in delivering a fairer deal for consumers. This could help inject some much-needed competition in the space, forcing traditional institutions to innovate.

Learn more about Changelly PRO

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

What are the downsides to using crypto?

The likes of Bitcoin often get criticized for being too volatile, and some say blockchain technology is too difficult for everyday consumers to understand.

It’s important to note that there’s one factor that will determine whether or not crypto-based cross-border payments are cheaper: the digital asset that’s being used.

Making transfers using Bitcoin and Ether can be expensive, especially during times of peak demand. Ethereum has been overwhelmed by transaction volumes on multiple occasions over the years — fueled by a rise in demand for collectible cats and decentralized finance. Addressing scalability concerns is going to be crucial if cryptocurrencies are going to be used more widely for remittances. Ripple, which doesn’t have a blockchain, offers solutions that are designed to make cross-border payments less expensive through the XRP asset. Several banks are already on board, and Ripple claims that it can process 50,000 transactions per second.

Crypto will only help to solve financial inclusion provided that those who stand to benefit most from remittances can be educated about how digital assets work, and have access to internet-enabled smartphones so they can access their funds. There are reasons to be optimistic here. As we mentioned earlier, 80% of consumers in sub-Saharan Africa are unbanked, yet 91% own a mobile phone — and smartphone adoption is rising. On the continent, mobile payments are also exceedingly popular, meaning that the leap to crypto-based transactions may not be a big one.

The final challenge concerns regulation. Industry executives have warned that more crypto regulation is coming, with the European Union recently announcing plans to comprehensively monitor the market in just four years’ time. This doesn’t necessarily mean that a ban on digital assets is on the horizon — indeed, many lawmakers have acknowledged that they can have advantages in reducing the costs associated with cross-border payments. As a result, some are exploring whether they should launch their own central bank digital currency.

How much money is sent around the world using crypto?

Digital assets have a modest market share of overall cross-border payments — but demand is growing.

According to Juniper Research, international digital remittances are set to surge to $525 billion by 2024… a 102% rise from where they were in 2019. This figure includes fintech platforms that solely deal in flat.

“Utilizing a blockchain-powered network, operators can offer their users a much faster, cheaper and more transparent service,” the authors said.

This view has been echoed by BlockData, which recently revealed that blockchain-based transactions are typically 388 times faster and 127 times cheaper than traditional remittances.

It’s a fast-moving industry, and it’s difficult to put an exact number on the volumes of cross-border payments made using crypto. However, figures from Clovr showed that 15% of those who made remittances from the U.S. in 2017 used a digital asset such as Bitcoin — making it more popular than prepaid cards, checks and cash. When it comes to business-to-business payments made via blockchain, this figure stood at $171 billion in 2019, but Juniper Research estimates that this will exceed $4.4 trillion in just four years’ time.

What advantages does crypto offer over fiat?

It’s cheaper and faster… and could also help clamp down on money laundering.

There’s a lot of excitement surrounding how crypto could transform cross-border payments as we know it — making remittances, where workers in foreign countries send funds to their loved ones back home, much less expensive.

At present, the World Bank estimates that remittances sent through fiat channels result in average fees of 6.75%. For someone on a modest income, this can take a substantial chunk out of their earnings. Although this is less than the 9.67% charged in 2009, there’s still a long way to go. In the early 2010s, the G8 and the G20 set a target of slashing remittance costs to 5% — and the United Nations’ Sustainable Development Goals also set a target of 3% by 2030.

Cryptocurrencies could help these goals be realized much faster. According to figures from Deloitte, blockchain has the potential to reduce transaction costs by 40% to 80%. But the advantages may not end here. Currently, it can take three to five business days for funds to clear through old-fashioned wire networks — not ideal for someone who needs money in a hurry. But on certain blockchains, it’s possible for payments to be confirmed in seconds.

The advantages may not end here. As Deloitte notes, blockchain transactions can be data rich — meaning that metadata can be transmitted from end to end. All of this can help clamp down on money laundering and terrorist financing, two areas of concern for regulators. Many crypto platforms have introduced Know Your Customer checks to verify users, too.

One crucial benefit that cryptocurrencies can offer is unlocking access to financial services for the unbanked. Research suggests that 80% of consumers in sub-Saharan Africa fall into this category — and worldwide, a total of 1.7 billion people don’t have a bank account. There can be a multitude of reasons for this. Financial institutions may not operate in their geographic area, these services could be too expensive, or consumers may have a lack of trust.

How do crypto cross-border payments work?

These transactions are executed using blockchains — eliminating the need for banks, who often slow payments down substantially.

Let’s imagine that you’re in Spain but want to send funds to Africa. The first step involves converting fiat currency into a digital asset of your choice. A wide range of websites and platforms exist that serve as an “on-ramp” — meaning purchases can be made using bank transfers and credit cards.

This cryptocurrency can be held in a secure wallet. When it’s time to make a transfer to your friends, they can give you the address for their wallet — comparable to the account number you’d get at an old-fashioned bank. These addresses can contain dozens of characters, so transcribing them carefully is crucial.

Once funds have arrived in an account, the recipient has several choices. They can either convert the crypto to fiat and withdraw it, or swap it for a less volatile digital asset such as a stablecoin.

How DeFi can improve the e-commerce sector

DeFi and shopping may seem like an unlikely combination, but these protocols have the potential to unlock better deals for consumers and merchants alike.

Uquid

Decentralized finance and shopping seem like an unusual combination at first. How can liquidity pools help you save money at the till? But scratch a little deeper and some compelling use cases for DeFi emerge. With the retail sector suffering through one of the most challenging times seen in a generation, here are the main issues facing e-commerce right now… and how DeFi could fix them.

A match made in heaven?

The likes of Amazon, eBay and Shopify have transformed the way we buy everyday items. Now, anyone can become a merchant — and once exotic products can be delivered to your doorstep in a matter of hours. But the rise of these e-commerce platforms has created some new problems, and exacerbated old ones.

Small businesses selling their wares through these online shopping giants can often end up paying commission fees of 15% to 20%, eating into razor-thin profit margins. Inevitably, some of these costs end up being passed on to customers, meaning that they’re paying much more for items than they may have done in a decentralized setting.

Some blockchain platforms are already tackling this issue — and attitudes are beginning to change. PayPal has now started to roll out its crypto trading service, meaning millions of merchants will soon be able to accept digital assets as a payment method. Deutsche Bank has also warned that cash’s days are numbered, and criticized the likes of Visa and Mastercard in a recent report. “They wield significant power to set prices, which is not great news for retailers or consumers,” the German financial giant wrote.

DeFi has form when it comes to cutting costs, and already removes middlemen for those who are looking to move their cryptocurrencies from A to B. But there are other advantages that can be realized too, eliminating some of the pain points that centralization cannot fix.

DeFining loyalty

Loyalty schemes top this list. As Deloitte recently noted, the tried-and-tested approach of securing repeat custom from shoppers needs a drastic rethink — warning that traditional schemes are “tired” and lack personalization. Its report said that customers now expect rewards that are tailored around their personal tastes, and younger shoppers want their favorite brands to use technology that delivers a frictionless experience.

“Businesses need to adapt to the digital age by adopting agile and flexible solutions that will allow them to realign their customer experience program to constantly changing customer expectations and needs,” Deloitte added.

One of the biggest flaws in loyalty schemes lies in how siloed they can be. Many retailers have their own systems, leaving shoppers with little choice but to individually register to each one. This can be incredibly inefficient, not least because time-starved consumers are likely to forego discounts if it means filling out yet another application form.

But DeFi could help remove this friction — creating a world where customers only need a single address to receive reward points from the places they shop. Smart contracts could ensure that these loyalty schemes transcend borders too, meaning a British tourist who makes a purchase at a Costco in the U.S. can earn points just like they would back home. All of this can help make loyalty programs clearer and more transparent. Encouraging retailers to work together can also make these schemes more financially viable — and this is important given how Deloitte describes existing initiatives as “risky and expensive.” Just like DeFi can help the world’s 1.7 billion unbanked consumers access financial services, it can also open much-needed doors to the world of e-commerce.

Giving retail a DeFi makeover extends far beyond discount sneakers. If done right, protocols could also give merchants a better deal — allowing them to weather tough economies (such as those brought about by the coronavirus pandemic.)

Every day, these small businesses face a dilemma. Frictionless payments make it easier for shoppers to make impulse purchases, but they can increase levels of fraud — and in many cases, merchants are expected to foot the bill in the event of chargebacks. According to The Nilson Report, $32 billion was lost to card fraud in 2019, and it’s an issue that’s set to stubbornly remain throughout the 2020s.

Smart contracts, smarter shopping

Uquid is aiming to establish a bridge between DeFi and e-commerce through Defito, a new ecosystem featuring concepts that haven’t been seen in the retail sector before.

Shopping mining means that new tokens or coins are generated every time a customer buys an item — and smart contracts are used to ensure that these assets can be put toward other purchases in the future. The process is automatic and immediate, delivering much-needed enhancements that eliminate some of the flaws associated with loyalty schemes right now.

There are also features inspired by automated market makers, the smart contracts that create liquidity pools of tokens. In this ecosystem, automated shopping making brings together pools of goods created by many suppliers. Customers can then connect directly to this pool and track the quantity of products available and their price, allowing them to get a better deal on items that they wish to purchase.

In time, it is hoped that these smart contracts will allow merchants and shoppers to connect without an intermediary — reducing costs for everyone. Uquid believes that DeFi can help e-commerce businesses grow quickly and reach a broader cross-section of customers around the world. The company is also confident that its approach could transform global trade.

One of the first places where people can shop using this ecosystem is Uquid’s digital shop, which is home to more than 40,000 digital products including video games, gift cards, subscriptions and mobile top-ups. The platform uses a Lightning Network node that helps to speed up transactions, all while making them cheaper. New products are added on a daily basis, and the e-commerce site is planning to add physical items in the near future.

Brick-and-mortar retail is on the decline, and retailers are getting innovative as they compete for attention in a crowded marketplace. Fresh from shaking up the financial sector, DeFi could be coming to a shopping basket near you.

Learn more about Uquid

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

How DeFi can improve the e-commerce sector

DeFi and shopping may seem like an unlikely combination, but these protocols have the potential to unlock better deals for consumers and merchants alike.

Uquid

Decentralized finance and shopping seem like an unusual combination at first. How can liquidity pools help you save money at the till? But scratch a little deeper and some compelling use cases for DeFi emerge. With the retail sector suffering through one of the most challenging times seen in a generation, here are the main issues facing e-commerce right now… and how DeFi could fix them.

A match made in heaven?

The likes of Amazon, eBay and Shopify have transformed the way we buy everyday items. Now, anyone can become a merchant — and once exotic products can be delivered to your doorstep in a matter of hours. But the rise of these e-commerce platforms has created some new problems, and exacerbated old ones.

Small businesses selling their wares through these online shopping giants can often end up paying commission fees of 15% to 20%, eating into razor-thin profit margins. Inevitably, some of these costs end up being passed on to customers, meaning that they’re paying much more for items than they may have done in a decentralized setting.

Some blockchain platforms are already tackling this issue — and attitudes are beginning to change. PayPal has now started to roll out its crypto trading service, meaning millions of merchants will soon be able to accept digital assets as a payment method. Deutsche Bank has also warned that cash’s days are numbered, and criticized the likes of Visa and Mastercard in a recent report. “They wield significant power to set prices, which is not great news for retailers or consumers,” the German financial giant wrote.

DeFi has form when it comes to cutting costs, and already removes middlemen for those who are looking to move their cryptocurrencies from A to B. But there are other advantages that can be realized too, eliminating some of the pain points that centralization cannot fix.

DeFining loyalty

Loyalty schemes top this list. As Deloitte recently noted, the tried-and-tested approach of securing repeat custom from shoppers needs a drastic rethink — warning that traditional schemes are “tired” and lack personalization. Its report said that customers now expect rewards that are tailored around their personal tastes, and younger shoppers want their favorite brands to use technology that delivers a frictionless experience.

“Businesses need to adapt to the digital age by adopting agile and flexible solutions that will allow them to realign their customer experience program to constantly changing customer expectations and needs,” Deloitte added.

One of the biggest flaws in loyalty schemes lies in how siloed they can be. Many retailers have their own systems, leaving shoppers with little choice but to individually register to each one. This can be incredibly inefficient, not least because time-starved consumers are likely to forego discounts if it means filling out yet another application form.

But DeFi could help remove this friction — creating a world where customers only need a single address to receive reward points from the places they shop. Smart contracts could ensure that these loyalty schemes transcend borders too, meaning a British tourist who makes a purchase at a Costco in the U.S. can earn points just like they would back home. All of this can help make loyalty programs clearer and more transparent. Encouraging retailers to work together can also make these schemes more financially viable — and this is important given how Deloitte describes existing initiatives as “risky and expensive.” Just like DeFi can help the world’s 1.7 billion unbanked consumers access financial services, it can also open much-needed doors to the world of e-commerce.

Giving retail a DeFi makeover extends far beyond discount sneakers. If done right, protocols could also give merchants a better deal — allowing them to weather tough economies (such as those brought about by the coronavirus pandemic.)

Every day, these small businesses face a dilemma. Frictionless payments make it easier for shoppers to make impulse purchases, but they can increase levels of fraud — and in many cases, merchants are expected to foot the bill in the event of chargebacks. According to The Nilson Report, $32 billion was lost to card fraud in 2019, and it’s an issue that’s set to stubbornly remain throughout the 2020s.

Smart contracts, smarter shopping

Uquid is aiming to establish a bridge between DeFi and e-commerce through Defito, a new ecosystem featuring concepts that haven’t been seen in the retail sector before.

Shopping mining means that new tokens or coins are generated every time a customer buys an item — and smart contracts are used to ensure that these assets can be put toward other purchases in the future. The process is automatic and immediate, delivering much-needed enhancements that eliminate some of the flaws associated with loyalty schemes right now.

There are also features inspired by automated market makers, the smart contracts that create liquidity pools of tokens. In this ecosystem, automated shopping making brings together pools of goods created by many suppliers. Customers can then connect directly to this pool and track the quantity of products available and their price, allowing them to get a better deal on items that they wish to purchase.

In time, it is hoped that these smart contracts will allow merchants and shoppers to connect without an intermediary — reducing costs for everyone. Uquid believes that DeFi can help e-commerce businesses grow quickly and reach a broader cross-section of customers around the world. The company is also confident that its approach could transform global trade.

One of the first places where people can shop using this ecosystem is Uquid’s digital shop, which is home to more than 40,000 digital products including video games, gift cards, subscriptions and mobile top-ups. The platform uses a Lightning Network node that helps to speed up transactions, all while making them cheaper. New products are added on a daily basis, and the e-commerce site is planning to add physical items in the near future.

Brick-and-mortar retail is on the decline, and retailers are getting innovative as they compete for attention in a crowded marketplace. Fresh from shaking up the financial sector, DeFi could be coming to a shopping basket near you.

Learn more about Uquid

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Q&A: Big data’s role in medicine, supply chains and smart cities

Can monetizing our data help speed up the world’s response to future pandemics, and make cutting-edge smart cities a reality? We asked an expert.

Data is incredibly valuable. But right now, it’s being underutilized — and few of us have control over our digital footprint.

Here, CyberVein’s global marketing director Pavel Jakovlev explains the network’s vision for big data, its use cases, and how everyday consumers can monetize their personal information.

1. Put simply, what does CyberVein do?

CyberVein, just like Google, is always in beta. We have incredible developers and strategists, who are working on bespoke data management solutions for a variety of use cases: medical data handling, smart city initiatives, logistics/supply chains and Internet of Things. We would love to see our technology being used anywhere a fast data transfer is required in a decentralized manner.

2. How does data monetization work?

There's an ongoing debate about data ethics. More specifically, after the Cambridge Analytica scandal and a number of Netflix documentaries, like The Great Hack and The Social Dilemma, people are becoming aware of just how much data they are exchanging for services provided by Google, Facebook, Twitter and others. This message is also being propagated by Brittany Kaiser, the Cambridge Analytica whistleblower, who became a data ethics advocate and set up the Own Your Data Foundation. 

We are taking this notion even further by enabling people and data owners to monetize their personal data. Data submitted to our platform is managed via a virtual machine to ensure it is kept safe, and then priced in a market-type environment. Once the data is purchased, data owners receive payments in CVT tokens. We may disregard our data, but it can provide valuable insights, train machine learning algorithms, and subsequently create better products and services for our society. 

In addition, our recently launched product CROSS is the world's first big data-backed non-fungible token (NFT) issuance platform, which will record data exchange transactions whenever they are made. Our ambition is to drive the development of the big data ecosystem and to create additional value for businesses and governments around the globe.

3. What are the benefits of creating a marketplace for data?

It may seem like there’s a never-ending conflict of interest between corporations and individuals. On one side there’s a desire to collect unfathomable amounts of data to satisfy business needs and build better predictions, while the other side is becoming more concerned about waning levels of privacy. Therefore, creating a marketplace for better data exchange is not that simple. There have been many attempts before, but some obstacles, mainly regulatory, remain. Our idea is to reconcile both sides by creating distributed storage, where actions take place on chain and are therefore immutable, yet private data remains private.

Once achieved at scale, people and data owners would be able to take control of their data and choose what to do with it. We may still regard our social and behavioral data as insignificant, but medical data can be really valuable. For example, Estonia managed to build a permission-based decentralized database for its health records, allowing its citizens to track who accessed their data. Imagine replicating that on a grander scale, with an actual marketplace where you can submit your data, help train an algorithm, and get paid for it.

More insights from cybervein here

4. Could CyberVein benefit the medical industry in the coronavirus age?

The COVID-19 crisis exposed some basic human needs. We all want to be safe, we all care about the safety of others — but in that rush to cover our basic needs, we lost trust in each other. The personal protective equipment marketplace became the Wild West. Opportunists were eager to drive up prices, and people cared little about the quality. 

What CyberVein can do is bring the trust back to the marketplace with our technology. As well as enhancing track and trace systems, we can also record product standards onto the blockchain — making the specifications immutable. This would improve the authenticity and integrity of supply chains, and solve data problems that still exist in the PPE market.

Longer term, CyberVein’s solution can also bolster the interconnectivity of medical databases. Imagine this to be a privacy conserving toolbox where doctors, medical practitioners and academics optimize their research by accessing data with permission. For the healthcare sector, better access to research and shared knowledge means more preventive measures and a faster response to future pandemics. 

5. Can you explain how the Data Analytics and Valuation Engine (DAVE) works?

CyberVein’s Data Analytics and Valuation Engine (DAVE) focuses on providing value to its members — data-intensive companies. The DAVE Alliance offers three core solutions:

  • A data, storage space, or computing power (GPU) marketplace, where users can purchase said resources with CyberVein’s CVT tokens.
  • A data derivatives pool, where users can purchase derivatives of data extraction and big data concepts.
  • A decentralized token exchange, where users can swap member companies’ tokens directly with each other.

DAVE’s objective is to continuously provide value to member companies and individuals, who are eager to combine their resources in a bid to monetize their data. In its core, DAVE propagates data ownership and security. This initiative is in line with CyberVein’s vision to solve three major problems in the big data space: information siloing, data ownership and security, and data monetization. 

What’s even more exciting is the fact that transactions will be backed by NFTs. DAVE’s algorithm will allow parties to hedge their risks on CROSS, our NFT issuance platform. NFTs will have contracts and zips. Contracts contain information about the actual products, while zips will contain datasets. All NFTs issued on the CROSS platform will be voted on by the DAVE community, with the right governance in place to ensure that investors' interests are protected. 

6. You’ve been involved in some pretty big projects so far. What were the highlights?

Definitely our medical data project. We built an interconnected platform that combines medical information from decentralized databases without compromising the privacy of doctors or patients. Big data in healthcare can be widely used to track epidemics and deliver clinical treatments. It can play an important role in improving people's health and wellbeing, and meeting the world’s growing health needs. 

The platform allows doctors and patients to view their medical history in a more straightforward way through the patient holographic view. The system records a patient’s diagnosis, medication, past examinations, treatments, surgeries and other data. Compared with traditional methods, big data applications can give patients a more friendly diagnosis and treatment experience.

7. You use a distributed ledger where there’s no need for block confirmation. How does that work? 

For speed! One of our technology’s key characteristics is the DAG storage chain. It creates safer data storage, with better efficiency, no block confirmation and low transaction fees. Because there is no block confirmation, it eliminates the need for miners. 

DAG also supports asynchronous verification and parallel processing of each node. With this, we are solving the scalability issue — more nodes means faster speeds and greater scalability. Therefore, out tech performs better when scaled. Plus, the database backup on DAG storage chain provides an extra layer of security. We refer to our no block confirmation as Proof of Contribution — similar to Proof of Work and Proof of Stake.

8. Why is it important to partner up with other data-intensive blockchain projects?

We are building a data exchange, where other data-intensive blockchain projects can commit their resources in a market-like environment. Companies are set to benefit from increased exposure, leverage combined opportunities, and build better practices for data usage. Projects and their respective token holders will be able to swap tokens directly, commit their resources to the overall compute and storage data pools, as well as bid for different data sets in an open marketplace. All transactions will be pegged to NFTs.

We have the likes of IOST, CyberMiles, IoTeX and others joining the DAVE initiative and we look to onboard more projects. In the imminent era of 5G/6G connectivity, data is the ultimate currency, the new oil as some may say. With DAVE deployed, users can choose CyberVein's DAG storage chain or Filecoin's IPFS for storage. Likewise, users can choose to use CyberVein's cloud computing, or opt for Golem's GPU platform.

9. In the years to come, what will smart cities look like?

Smart cities are hypercomplex data-producing systems that rely on constant interconnectivity and data exchange. We will surely see more traditional services become digital and plug into the overall mesh of a smart city’s interconnectivity. We can imagine shopping, logistics and delivery services becoming more user centric and, in turn, more digital — based on an individual’s behavioral data. 

With millions of individuals to cater to, a smart city’s system would have to optimize its processes to find the best possible way to fulfill the predictive wish lists of individuals. This could be something as basic as stacking their smart fridges with fresh food and delivering it in time, likely in a driverless delivery vehicle. A simple daily groceries run can result in billions, if not trillions of micro-transactions within one system. 

This system cannot rely on one centralized database, so naturally, a distributed ledger would be used. However, it needs to be lightning fast in recording and synchronizing the data. This is what we, at CyberVein, are building with our lightning fast PISR database, and our DAG storage chain, which further increases throughput per second. 

10. How can people get involved with the CyberVein ecosystem?

The first step would be to join our community and talk to us. We are present on most social media platforms. We have strong communities in different countries and talk to our fan base on Telegram, WeChat and Kakao. We organize a ton of AMAs too! You can find more info about us on our website or by searching the above mentioned platforms for CyberVein.

The second step would be to stay up to date with different announcements. We are really excited about the DAVE initiative and will soon open it up to individual resource contributors. 

The third step, and this is mainly for blockchain companies working within the realm of data storage and cloud GPU — let’s talk. In addition to providing development resources, we commit to supporting DAVE members with marketing, communications, and public relations activities. Continuous community engagement campaigns are crucial for DAVE. 

With regards to CROSS, our NFT issuance platform, anyone will be able to issue their own NFTs and add the necessary info about their project or business, making sure that it stays there due to its immutable nature. 

We strongly believe in uniting with like-minded individuals and companies who are eager to combine their resources in a bid to monetize their data. Here’s how this process looks in practise:

  • Companies or individuals join the DAVE Alliance, access the PISR database and CyberVein mainnet. 
  • Within the DAVE ecosystem, any entity can use big data storage, access academic research, or utilize applications from various service providers (IoTeX, Filecoin, Sia, Streamr, Golem, Tron) to improve efficiencies.
  • The CROSS platform packages business scenarios into NFTs according to the asset types, asset legal status, cashflow and other variables. NFT features may include collectibles, financial products, insurance, bonds, bills, membership cards, shares, KYC, donations, product supply chain tracking, and so on.
  • DAVE compares the asset with thousands of other cases in the framework. Subsequently, the NFT is published on the CROSS platform for trading, exchange, and auction.

CROSS’ core technology enables NFT issuers to back any business scenario and not just collectables. This is our key differentiator, our USP.

Learn more about CyberVein

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Q&A: What Are Tokenized Portfolios, and How Do They Work?

Tokenized portfolios are increasing in popularity — but how do they work, and what’s in it for traders who launch them? We asked an expert.

Tokenized portfolios are gaining momentum as an effective way for everyday consumers to gain exposure to major cryptocurrencies without owning them directly. Instead, they own shares in a fund in the form of tokens.

Here, Tokenbox.io co-founder and managing partner Vladimir Smerkis explains a little bit more about how they work.

1. What makes tokenized portfolios so special?

First of all tokenized portfolios give people transparency. As a main global benefit of blockchain technology, tokenization makes it possible to review the full way of how assets are moving from user to platform and the other way around.

We believe the tokenization of every asset in the world is a matter of time.

Storage is an important part of tokenization also. You no longer need to sign tons of documents, order safe storage in the bank for your useless paper, everything you need to have - as an internet access. Portfolio managers can accept investors without onboarding clients. You can use these tokens as a storage of a "digital ETF" pie, and do redemptions whenever you want.

Easily countable. Portfolio tokens represent a value of all funds in a portfolio divided by number of investors. Simple math that a middle schooler could do.

2. What’s in it for the traders who launch a portfolio?

So a trader creates a portfolio (or many portfolios if they have multiple strategies), sets up a token, its value and describes briefly its strategy and sets its own fees (entry fee, exit fee and upside fee). This whole operation takes no more than one minute.

Traders can get investors/clients within a platform. They can create and track multiple portfolios. It can be both public and private. If a trader doesn’t want to accept internal investors from the platform it is possible to hide the portfolio from the public.

They can onboard clients easily.

3. How can potential investors verify that a portfolio is a good opportunity?

Transparency and trust are the key factors.

Every investor can take a deep look inside every trader's moves, losses and gains throughout its existence.

A variety of strategies from hundreds of traders on the platform provide the possibility to spread investors’ funds in a safe and diversified way. Trading is a 24/7 job. Not many investors can do it. But they can easily diversify their assets and investments with multiple strategies. Tokenized portfolios make all of this transparent.

4. Are there any minimum investment amounts that consumers face?

We believe that liberal blockchain rules definitely need to be applied to the Tokenbox platform too, that’s why everyone, including people just getting their feet in the crypto world should have the opportunity to participate.

We have a minimum of just 20 USD for investing portfolios. There is no minimum for using our wallets, exchange and other features we have.

5. Can exposure to cryptocurrencies help an investor diversify their portfolio?

Definitely. Nothing changed over the past 3 or 4 years. Cryptocurrencies have tremendous upside potential, but the risks are harder for newbies to spot. That’s the reason a lot of newcomers see volatility of +20%-40% and go all in, losing all of their funds exploring margin calls for the first time. I believe that every rational investor should be in crypto for at least 5%-10% of their funds and everyone should keep in mind that this field has a high risk of losing all of your investment.

That’s why when you start to explore the market it is better to diversify and trust professionals.

My exact recommendation would be to take a look at portfolios and traders we have on the platform, looking at the performance stats every one of them has on its portfolio page.

6. What should an investor look for when they are comparing tokenized portfolios?

Don’t believe words, only results. We can post a beautiful picture of a nice gentleman with a smile in a beautiful suit, but that doesn’t mean he’s a good trader.

Strategy. You should understand what traders are attempting to do. Is he going for high risk, high return or a low-risk, low upside profile.

Stats. Explore each stats page - what was the performance over the past period of time, what was the biggest loss.

AUM and number of investors. We’ve only just started, so there are not thousands of investors with track records on our platform. But even so, as a general rule, the more investors that trust a certain trader, the more likely that trader is bringing real benefits to the public..

And remember, if you change your mind you can easily move from one portfolio to another by selling tokens in the blink of an eye.

7. What are some of the features that Tokenbox offers?

We are a full-service platform for storing, buying, selling, trading, and gaining exposure to digital assets. We are the only platform that is not a copycat, offering a unique service.

We are very user-friendly (including our quick support team), we deliver unique services both for traders, investors and all of the blockchain/crypto people around the globe. 

A list of our main features would include the following:

  • a crypto wallet 
  • buying crypto with a credit card
  • an exchange terminal for traders
  • multiple trading accounts (sub-accounts)
  • multiple portfolio accounts (for traders who would like to accept investments from platform users)

8. Why would someone want to buy into someone else’s portfolio when they can build one themselves?

The short answer? “Two heads are better than one.”

I’ve seen dozens of people who pretended to become “pro traders” within a month they hopped on the latest trend. At first they succeeded when the market was growing, but then they lost everything when the market crashed.

I believe that being a pro trader is a really hard job that requires you to be online 24/7. But also — trading is a psychological game, and people make mistakes.

For me, as a professional in this field I do both — trade for myself and invest in our platforms traders portfolios.

9. Are these types of products suitable for those who are new to cryptocurrencies?

I would divide our product offerings by a user’s knowledge level:

Newbies can get a sense of crypto investing space without the need to invest thousands or hundreds of thousands of their funds in ETFs, funds or unknown traders.

PROs can diversify their investments by “hiring trading heads,” which in the end will be cheaper, than having one trading desk at the office. 

Traders can run their portfolio, like they did before, but on a user-friendly platform and (what’s important) get clients and earn for clients and themselves, which is totally a win-win solution.

Q&A: How Blockchain Could Transform the Art Industry

Blockchain is transforming industries left, right and center — but how could this technology benefit the art world?

4ARTechnologies

The art world has had a tough time lately. The coronavirus pandemic has forced many galleries and museums to close, with sales of premium pieces also affected.

But there could be a solution that helps the industry get back on its feet and achieve much-needed digitization: blockchain. Here, we talk to Niko Kipouros, founder and CEO of 4ARTechnologies, about how this technology could transform the way we purchase and own artwork — and even ensure that the provenance and authenticity of masterpieces are never doubted.

1. What are the biggest challenges facing the art industry right now?

The surge of the COVID-19 pandemic shuttered galleries and museums, while exhibitions, art fairs and auctions have either been postponed or moved online. The art world ground to a halt. It became immediately visible that all players in the art market are vulnerable to physical distancing measures implemented to slow down the spread of the pandemic. If people are not allowed to leave their homes or attend big events, then what is left of the business models of exhibitions, art fairs and auctions?

Everyone in the industry is now aware that the art market as we know it will never return. Digital tools can help us overcome restrictions on physical operations.

2. Can blockchain solve any of these issues? Does the art industry really need blockchain?

Blockchain opened the space within the existing art system. What blockchain brings to the art industry is unprecedented security and accountability, along with introducing decentralization on an institutional level.

Operating in the sphere of art, blockchain allows for the decentralized, immutable storage of data and documentation while enabling the automation of many daily art handling tasks.

The technology can’t do it alone, but it provides a secure, verified information foundation on which solutions and services can be built.

3. How does the tokenization of art work? Does this mean that an everyday consumer could partly own a renowned masterpiece?

The tokenization of an asset — in our case, an art piece — makes it available to be traded and handled digitally. Artworks can be tokenized in two different ways: either a single token per art object or multiple tokens to allow for fractionalized ownership.

The single token option is only relevant for art collectors and those who want to better manage their collection. Far more groups, from the arts as well as the finance industry, are exploring the creation of a larger number of tokens for a single artwork.

The excitement there is based on two important aspects. For one, it allows previously untradable artworks to be made available to the art market, which is especially beneficial to public institutions that continuously lack funding.

Even more interesting, an artwork can be owned by a large number of people through blockchain-based tokenization, making art and art collecting far more accessible and more democratic.

These digital frameworks also allow for completely new ways to own and enjoy art. 

In a pilot project of ours known as ARTCELS, tokenholders gain access to enjoy and share the tokenized collection in a virtual reality showroom within the 4ARTapp. We are seeing a surge in demand for these models, and we are certain that in the future, many collectors will only hold a portfolio of artwork tokens — a purely virtual collection.

Why have one piece of art on your wall when you can choose from the whole collection and enjoy it the same?

4. What else can be digitized in the art industry?

The art industry is ripe for digitization. Most of the business is still done as it was 30, 40, or even 50 years ago.

Registering artworks, creating artist catalogs, condition reporting, updating or transmitting documentation, and tracking movements: All the processes that are part of the logistics chain in the art industry can be digitized.

As we have seen in response to the COVID-19 pandemic, even major international exhibitions can be digitized. The art world is in urgent need and just waiting for creative solutions.

5. What about cryptocurrencies? Are they part of this digitization?

Cryptocurrencies offer qualities that a global market like the arts always requires: fast peer-to-peer transactions, little regard for borders and minimal losses. They also solve the double-spend problem to facilitate transactions that were previously secured by more complex, expensive escrow solutions. Or you can create automatic participation models for artists, content creators and communities so they get reimbursed for their efforts.

In the future, we will also support peer-to-peer 4ARTcoin transactions, including artwork purchases, within the 4ARTapp. Even more important are our campaigns to have other networks, galleries, museums, exhibitions and online platforms accept the 4ARTcoin. As with all of our efforts, while we may believe very strongly in its advantages, we require partners and like-minded innovators to make it happen.

6. Blockchain is difficult for many to understand. How does 4ARTechnologies plan to achieve mainstream adoption?

As with all new technologies, especially revolutionary ones, it is not necessary for users or customers to understand how they work in full detail. Very few know how most everyday devices really work, be it microwaves, cars, the internet or even currency.

What adopters of a technology are interested in are the benefits — how these innovations can provide new possibilities and solutions.

The technologies, including blockchain, that our company is deploying are cutting-edge and very complex, but the benefits — being able to store information and documents immutably, being able to automate and simplify daily tasks, and being able to communicate and transmit information securely — are easy to understand and will bring about mainstream adoption.

7. There used to be a plethora of blockchain projects in the art industry. Many of them have already disappeared. How do you set yourself apart from the competition?

Previous ventures had two major issues: a lack of reliable artwork identification and a small scope for their solutions. A digital certificate or document is essentially useless, with or without blockchain, if it cannot be directly and reliably linked to the physical artwork.

This is the first roadblock that kept other ventures from finding acceptance and success.

With the 4ARTapp, we have implemented this functionality in a way that can’t be manipulated and that does not require the object to be marked with a sticker or chip. 

If you have ever seen an art forger at work, these things would never stop them.

With our solution, we use the artwork itself as the key to its documentation and history.

To gain adoption within the art world, solutions need to be wide ranging and usable by many. Most have only focussed on the collector, and some on logistics, but essentially none on the artists. We offer benefits to all art world participants, with increasing value the more the 4ARTapp is used.

Connecting the global art community is the next big revolution, and we are happy to lead the way!

We are proud to say that 4ARTechnologies has been recognized for its vision in both the “CV VC Top 50 Report,” which lists top blockchain projects in Switzerland’s Crypto Valley, as well as in the “CV VC Global Report” as the number one blockchain project in the art industry. On Sept. 02, I will take part in a panel discussion organized by CV VC, which will be livestreamed, on the topic of how blockchain is shaping the art industry.

8. How does 4ARTechnologies’ plan for insurance work?

We have been in partnership with Munich Re, the world’s largest reinsurer, and its subsidiary Ergo Insurance for over a year. The goal of our pilot project is to create wholly new, purely digital solutions for artwork and transport insurance, based on our verification and condition reporting technologies.

Through their utilization, the individual or company looking to insure their artworks can do so quickly, easily and specific to their requirements. The insurer can significantly reduce the structural costs associated with art insurance and therefore offer far more attractive rates and services.

To give you a simple visual: An art collector uses their mobile device and the 4ARTapp to scan the microscopic surface structure of an artwork once per year. That detailed condition report, which takes mere minutes, is sent over to the insurer with all the relevant documentation within the 4ARTapp, quickly and highly securely.

The insurer does not have to use expensive experts to evaluate the condition and risk factors, rather they can do so automatically. The immense cost savings can be offered to the client in the form of favorable rates or other incentives.

The client has a better service at lower costs, and the insurer has far more accurate data on which to base its risk evaluation — a win-win situation through digitization.

9. Counterfeiting and establishing the authenticity of artworks have been big challenges for the art world. What does this platform do to address that?

The challenge of art forgery is what brought blockchain to the attention of the art world. However, without a secure link between the physical artwork and the digital information, blockchain alone cannot solve that challenge.

This is why we have developed our patented Augmented-Authentication-Technology. 

With our technology, everyone can easily and quickly create a digital fingerprint for an artwork, using nothing but a mobile device and the artwork itself.

With the identification being fast and absolutely tamper-proof, we can begin to use the capabilities provided by blockchain.

What we, or anyone, cannot solve is questionable authenticity for older artworks.

However, we have now initiated a new era of digital provenance, one where artists can register their works themselves and create a reliable, highly detailed, lossless history from the very first minute of the artwork’s existence.

For artists of today and tomorrow, the question of originality will no longer be relevant.

10. As blockchain and crypto become more widely used, where do you think the art industry will be in 10 years?

Blockchain offers a new platform for working with traditional art. This, to me, looks like a very promising partnership.

What’s more interesting and challenging is to think about what blockchain has to offer to contemporary and digital artists interested in code and data. How can it deal with new questions of authorship, copy, identity and so on?

Questions of society are always reflected and discussed in art. I am looking forward to trying to bridge this gap, and blockchain technology gives us the tools to do so.

Learn more about 4ARTechnologies

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Q&A: Top Copy Trader and Crypto Pundit on Their Market Predictions

Copy trading has exploded in popularity in recent years. Here, we ask established traders about what they get out of the bargain — and ask for their market predictions.

eToro

There’s a palpable buzz in crypto markets right now. Copy trading is gaining momentum, as it allows investors to emulate the moves of experienced traders.

We spoke to Jay Smith, a popular trader on the eToro platform who is otherwise known as Jaynemesis, as well as to Kevin Stanely, the host of the podcast CRYPTO 101. Here, they tell us more about how this feature works, share their predictions for Bitcoin and reveal which altcoins they believe are being badly overlooked right now.

1. Why would an established trader want someone to copy their moves? What’s in it for them?

Jaynemesis: Money, respect, fame, community and fun! We’ve all seen the fake gurus on social media. If you’re actually good, prove it! On eToro, all of my trades and stats are 100% transparent, so there is no debating whether or not I know what I’m doing, and I have the numbers to back me up. It’s also great for anyone who really cares about the projects they invest in. When people copy you, they are helping build the projects you like.

Kevin Stanely: An established trader wants someone to copy their moves because we love seeing people make money. Few things make us happier than being right, and there is no better way to gain respect and a devoted following than by putting your money where your mouth is, “opening up the kimono” and walking the walk.

2. How can the people copying a trader know that data about a portfolio’s performance is accurate?

Jaynemesis: Transparency is key. Not only can you look at someone’s stats page on eToro, but you can go through their trade history and calculate it yourself. You can copy virtually and test it out, or you can ask the thousands of other copiers within the eToro community if it really works. This has been my full-time job for over three years now, and most people take the fact that I don’t lose money for my copiers as quite convincing evidence that I know what I’m doing.

Kevin Stanely: You have to trust the social trading platform that is hosting that data. That’s why we only use eToro — a brokerage that has been around for 13 years, has over 13 million registered users and has an overall untarnished reputation.

3. Doesn’t all of the economic uncertainty brought about by COVID-19 make it impossible for even top traders to predict the markets?

Jaynemesis: Big corrections provide big opportunities. There’s a Warren Buffet quote that comes to mind: "Be fearful when others are greedy and greedy when others are fearful."

Kevin Stanely: Not at all, and in fact, quite the opposite. It makes it far easier. There is a famous saying that goes, “Don’t fight the Fed.” I believe the Fed is the market, as it controls the supply of the money that is valuing assets. Put another way, money is not the “value,” but just the measuring stick of value.

When you increase the amount of money in the system, assets get repriced higher in terms of the increased monetary base. The scarce assets such as shares of companies, gold, Bitcoin, etc., are the value. Indeed, their fundamentals have declined significantly — with a projected decline in cash flows, earnings, growth, etc. — but their stock prices are the same or even higher than where they were pre-COVID-19. How is that dislocation between stock price and value possible? Money supply.

Over the course of the past few months, the Fed has bought trillions of dollars of junk debt in order to inflate the money supply. Moreover, it has stated it doesn’t expect rates to go above 0% until 2022. The chairman of the Federal Reserve, Jerome Powell, also went on CBS’s 60 Minutes to say there is infinite money. This is to signal to the market that the Fed is “backstopping” asset prices and will stop at nothing to ensure that the global financial system has plenty of liquidity.

4. Do you buy into predictions that Bitcoin will hit $100,000 or believe PlanB’s stock-to-flow forecast that predicts it could reach $288,000 by 2024?

Jaynemesis: I used to subscribe to making long-term predictions about Bitcoin, but these days I prefer to focus on the few months in front of me. I still believe it will eventually hit $100,000-plus per coin, but there are all sorts of black swan events that can blur the picture. After all, most people didn’t see COVID-19 coming.

Kevin Stanely: Yes, absolutely. It is probably the single most robust quantitative model to forecast prices across commodities such as silver, gold and Bitcoin. I’m thinking that those prices will happen far, far, far sooner than 2024.

5. Have you got any bold predictions for where the crypto industry will be this time next year?

Jaynemesis: I actually believe the capitulation in altcoins will continue. The vast majority of alts have proven themselves incompetent at solving the problems they went out to fix after years of work. As the market matures, these altcoins will necessarily die out. Money and effort will instead be directed toward projects that are still showing great potential.

Kevin Stanely: This time next year, we will be full swing into a crypto bull run. Right now, we have hardly even begun it, but in 12 months, we will be in the thick of it. People who I haven’t talked to in years will start reaching out to me asking about crypto, no doubt.

Ethereum 2.0 will have had a successful launch and will be rolling out its new stages. Blockchains will begin to be fully interoperable, and I suspect we will see more financial institutions getting comfortable with crypto ownership.

Layer-two scaling solutions will be rolling out, and many strong altcoins will be proving their theses. “Security tokens” will be a big trend but won’t be known as “security tokens.” We will just see transfer agents such as Carta and Broadridge start “feeling the heat” from smart contract platforms, which do the same thing they do, but in an automated, decentralized, instant way. Life will be far more optimized.

6. Are there any cryptocurrencies that you believe are undervalued or overlooked?

Jaynemesis: 1. Ethereum: It’s still here, and it’s still attracting big companies and developers. It’s a survivor.

2. Basic Attention Token: I love this crypto. If you don’t know it yet, go install Brave as your main internet browser, and you’ll soon be converted.

3. Augur: This is a complex project that’s had complex problems, but they continue to work on it, and the potential is vast, if they can make it work.

Finally, I want to discuss IOTA. IOTA is extremely controversial, but I still believe in the words laid out by the founder when it first started: "IOTA will either be worth trillions of dollars or nothing." It’s an innovative approach to crypto, and the potential applications, if they can get it working properly, are huge.

Kevin Stanely: Yes! They are all in our model portfolio, which is available at cryptorevolution.com!

7. Do you use copy traders on eToro? And if so, how do you communicate with your copiers?

Jaynemesis: I’ve been a popular investor on eToro since 2016, so I’ve built a small community. Generally, we talk through the eToro newsfeed, Twitter or my Discord server. I also put out blog posts and YouTube videos to help ensure all of my copiers are well informed about what’s going on.

Kevin Stanely: I communicate with them through the eToro platform in the comments thread on all the posts.

8. A classic debate in the crypto community is whether the halving has already been priced into Bitcoin. What do you guys think?

Jaynemesis: The halving is never fully priced in. If markets were that efficient, trading wouldn’t be possible.

Kevin Stanely: Yes and no. Yes because every sophisticated investor in the crypto markets knows about the halving and uses that public information to factor into their models. But just because something is public info, it doesn’t mean that the rest of the world that doesn’t know about crypto is pricing it in.

In other words, only less than 1% of the world is “in” crypto right now, so everyone else is discounting the effects of the halving. Ultimately, the majority of the world — and by that I mean the majority of the world’s money — is not pricing in the halving simply because they don’t know about it.

9. Do you have any interesting or unusual investment strategies you can share with us?

Jaynemesis: I trade not only crypto but also invest in stocks. I approach both in the same way: I seek out disruption. Disruptive technology, disruptive business models and disruptive people.

Kevin Stanely: Have a system, and don’t trade on emotions. For example, one good system in my opinion is: “Sell half on a double.” Why? You enter a risk-free position at that point. Selling half on a double allows you to take out your principal investment and then invest with “house money,” helping to remove any sort of emotions from your investment decisions thereafter.

10. Copy trading, in some form anyway, has been around for decades. What makes eToro so different?

Jaynemesis: One thing I love about eToro is that there isn’t a crazy minimum for people to start copying. Not everyone has $10 million lying around to invest in a good hedge fund! On eToro, you get the performance of a managed portfolio even if you’re only copying with $200. It’s super accessible and an easy place for people to learn to trade and invest by copying people and learning from their strategies.

It’s also an amazing community. You usually don’t get that flowing conversation with a fund manager, but on eToro, you can really engage with other traders and investors, share ideas and learn from each other.

Kevin Stanely: EToro has an amazing customer support team with very quick response times, which is a rarity in crypto. Moreover, it has crypto assets as well as stocks to invest in on one platform.

It also has an awesome “virtual” trading platform for people new to the market who want to get their feet wet before they put real money at risk. EToro is a brokerage that has been around for 13 years, has over 13 million registered users and has an overall untarnished reputation.

Learn more about eToro

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Q&A: What is Prime Brokerage, and Will it Gain Traction in Crypto?

Is prime brokerage about to become more common in the crypto world, and what benefits can it deliver? We asked Bequant CEO’s for his perspective.

From margin trading to futures, many services have made the leap from traditional financial instruments to cryptocurrency. But there’s one that has yet to enter the consciousness of most crypto traders: prime brokerage.

Here, Bequant CEO George Zarya explains why 2020 could be the year that this technology starts to gain momentum, how it’s used across commodities and equities, and what it could deliver to those who currently own digital assets.

1. Can you explain prime brokerage simply? And why isn’t it common in the crypto world?

The main pain point a prime broker is solving for its clients is efficiency of collateral management. This means that clients may access multiple liquidity venues through one window, manage their collateral and settlements efficiently, and have access to leverage based on their overall portfolio, or so-called portfolio margining. 

The crypto world has been evolving quickly in terms of technology, but traditional finance expertise has yet to catch up. This year, “prime-brokerage” has been increasingly discussed among the community.

2. How common is prime brokerage in the traditional financial sector at the moment?

Prime brokerage is a centerpiece infrastructure for institutional investors, be they foriegn exchange, commodity or equity asset managers. Having an account at a prime broker is a must have, but small funds cannot always afford to meet the requirements of the bulge-bracket primes like Citigroup, Goldman Sachs, Nomura or JPMorgan Chase. So, startup managers go to “mini-primes” that are then plugged to the major primes’ infrastructure. In the retail space, there are names such as Interactive Broker or Saxo Bank that offer multi-exchange, multi-asset class access with some margin trading functionality.

3. So, how would crypto traders benefit from it?

Since prime brokers are in many cases the gateways to the market, institutional investors would greatly benefit from having a one-stop-shop solution to engage with the new, emerging digital assets market by having easy access to major crypto exchanges and a simplified onboarding process. Clients get one screen to manage collateral across a secure whitelisted custody framework, monitor positions, reconcile trades and have real-time net asset value numbers. They also have the flexibility to use a vendor of their choice to execute the trades or connect directly to the exchanges via a native application programming interface/Financial Information eXchange. Bequant can also provide a co-location facility at LD4 in London, where a number of prominent exchanges are hosted, that will benefit latency sensitive traders. And finally and most importantly, they have access to a balance sheet that allows leverage based on their overall portfolio. 

The availability of such services will bring the digital asset class closer to main financial assets and imminent integration into mainstream finance. 

4. Have digital assets like cryptocurrencies threatened traditional assets?

“Threatened” is a strong word, but I would say the crypto industry is poised to disrupt traditional finance. Security tokenization has been a buzzword for quite a while now, and blockchain technology is already being implemented across mainstream finance. We are seeing successful examples in cross-border payments, trade financing and settlements. Banking and finance behemoths operate on outdated legacy technology and will be forced to upgrade. I reckon blockchain technology will become a standard backbone for finance and banking in the future. It's just a matter of time.

5. How will crypto prices react to the coronavirus and Bitcoin’s halving?

We have seen correlation of Bitcoin to the S&P 500 as panic selling has spread through the markets, but we also have seen decoupling from these trends. I do believe the new digital asset class will recover sooner than any other asset classes, and Bitcoin’s halving will certainly help. As central banks continue to print money and cryptocurrency’s infrastructure matures, we will see the trend of adoption pick up the pace. The pandemic scare is a good test for crypto to show its value as a means of payments, cross-border transfers and settlements that are truly global and are not affected by any country shutting down or imposing restrictions on movements. 

6. Are Know Your Customer rules going to get tougher?

It is an absolute fact that Anti-Money Laundering regulation will continue to spread across the world and will become a must for any business to comply with in order to continue. We’ve seen this trend evolve starting two years ago, and now we see that securities regulations in general will apply to crypto as well. For example, margin trading rules or investor classifications imposed by the Markets in Financial Instruments Directive will most likely be extended to digital financial assets.

7. Is the fragmented state of crypto regulation something to worry about? What about the new Malta government?

I do not believe that this will cause a major hassle for participants, as we are already seeing regulators across the world talking about harmonized regulation across jurisdictions. European regulators are looking at a Pan-European framework that may take its core from the French digital assets framework. 

The new Malta government has yet to show its commitment to drive financial innovation and put actions to its words. It's like being half pregnant. With Bequant being one of the few companies applying for Virtual Financial Asset licenses, we are hopeful the process will gain traction soon.

8. What are the three biggest threats facing the crypto industry today?

There is a military acronym VUCA — volatile, uncertain, complex and ambiguous — that describes the world after the Cold War. This description can be applied to the state of the crypto market, but the threats are very much hypothetical, and I would argue that the industry does not have any life-threatening conditions. There are milestones that we will need to overcome before we can say that digital assets are another asset class:

  • Regulation: Crystallization of regulation across the globe on how assets are treated and participants regulated. Adoption of already existing securities regulations are imminent. 
  • Infrastructure and security: Custodian solutions are very important to bring peace of mind to investors. Global Digital Finance is an organization of which Bequant is a member. It runs a number of working groups that promote active discussions between market participants to promote best practices in the space and align institutional standards with custodians, exchanges and service providers. We have seen great progress in terms of technology evolution and understanding of critical practices that will ensure the safety of assets and the flexibility to go beyond cold storage custody.
  • Adoption: Slow adoption may cause markets to go into a state of hibernation. Successful progression on the first two points will drive institutional interest and hence bring more adoption. 

9. Can you explain why low latency and deep liquidity are so important?

With the recent market drop and skyrocketing volatility, latency and access to liquidity are most critical for profiting, or in some cases for survival. 

With the majority of the trading flow done via automated algorithmic trading systems, the slippage that one can suffer can be detrimental. Hence the industry is looking at offering institutional grade infrastructure. 

Bequant is the only exchange that offers co-location, multicast market data and a FIX 5.0 connectivity option, which is the market standard for traditional asset classes. Bequant exchange has a tick-to-trade latency of less than 400 microseconds to appeal to the most latency-sensitive traders.

10. What’s your advice for someone who is considering trading crypto for the first time?

Find someone who understands the marketplace and do proper research. The industry still has a lot of myths to bust and prejudice and unprofessionalism to overcome. Only professionals would be able to have a deep inside view and advise properly. 

Learn more about Bequant

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Crypto Custody, Explained

Crypto custody is the latest buzzword in the industry — but does it have the potential to interest institutional investors in digital assets?

Where next for crypto custody?

Financial institutions, regulators and investors are continuing to grapple with the issue of crypto custody.

Hearing stories from those who are plugged into these discussions can offer valuable clarity to what lies ahead.

The Crypto Finance Conference in the Swiss ski resort of St. Moritz, which is being held Jan. 15–17, is the perfect forum for lively debate and intelligence about the opportunities and challenges that lie ahead for the industry in the 2020s. Speakers at the event will include Cameron and Tyler Winklevoss — the twins who serve as president and CEO of Gemini respectively — and Hester Pierce, the commissioner of the U.S. Securities and Exchange Commission. 

The agenda explores the rapid evolution of the asset management industry and how crypto fits into the picture, and a deep dive into the challenges of banking in the world of blockchain. For those who prize the opportunity to secure new contacts in an infinite setting, and the ability to pose questions about crypto custody to influential figures on a one-to-one basis, organizers say this invite-only event is going to be an essential part of the year.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Is there any chance that crypto services could go mainstream?

Another big development came at the start of December. 

This was when Germany’s parliament passed a law that will enable banks in the country to sell cryptocurrencies and offer custodian services. Some enthusiasts have claimed this bill will pave the way for Europe’s biggest economy to become a crypto haven, while others fear that it could open up new risks to customers. One feared scenario is that the public will begin to invest in volatile coins and tokens without fully understanding the dangers, potentially losing their investments as a result.

Are there any early market leaders?

Few crypto-focused entities have cropped up in this space yet.

Coinbase proving itself to be an early market leader in offering institutional-grade solutions. Others include Vontobel, which has established a “digital asset vault” enabling more than 100 banks and wealth managers to orchestrate the purchase, custody and transferal of coins and tokens through the infrastructure and environment they have become accustomed to.

Venture capital firms like Andreessen Horowitz have backed crypto custody upstarts like Anchorage, and Bakkt has also made in-roads in providing Wall Street investors with ways to trade BTC in a regulated setting. Other well-known names such as Fidelity and Gemini have also launched offerings that are geared toward institutional users.

Who are crypto custody services aimed at?

Hedge funds with a substantial stake in cryptocurrencies aren’t the only ones who have the potential to benefit.

This market is also proving useful for everyday investors, with exchanges offering the centralized touch that many everyday consumers are used to.

From a regulatory standpoint, the benefits of crypto custody are obvious. The United States Securities and Exchange Commission is clear that any institutional investor that holds more than $150,000 in assets needs to ensure they are under the control of a “qualified custodian.”

What are the advantages of crypto custody?

In theory, crypto custody can help prevent assets from being lost. 

In the world of digital currencies, forgetting a private key can be nothing short of calamitous — without that all-important alphanumeric phrase, cryptocurrencies like Bitcoin and Ether can be lost forever.

Crypto custody solutions deliver an experience that’s more comparable to mainstream banking — just like a lost PIN code for a debit card can be replaced by a centralized authority without the funds they protect vanishing into thin air, these outfits are designed to keep large volumes of digital assets secure and insured.

What is crypto custody?

Well, it seems to be the latest trend that’s causing a buzz.

For the uninitiated, these services pave the way for digital assets to be securely held in large volumes. Some advocates believe that this could be one of the key factors needed to trigger an influx of new capital from institutional investors.

Many of the solutions out there make use of hot and cold storage. “Hot storage” refers to coins and tokens that are held in an environment that’s connected to the internet. Although this means assets are easier to access, this also means there is a higher risk that funds could be stolen through a cyber attack. “Cold storage” involves storing digital currencies away from an online connection. In theory, cold storage techniques are more secure because there is a lower risk of assets being stolen in cyberattacks and hacks. However, as we’ve seen with cases such as QuadrigaCX, even this approach doesn’t offer a cast-iron guarantee that funds will be kept safe.

Crypto Regulation: Is It Good or Bad for the Industry?

Some worry regulation will ruin crypto, others fear the industry will collapse without it. Who’s right, and what’s the way forward?

It’s the issue that never seems to go away: regulation. Some crypto advocates insist it is good for the industry, paving the way for mainstream adoption among consumers and businesses alike. Others warn a legal framework will only end in tears — stifling innovation and putting digital currencies at a disadvantage to fiat, which central banks remain determined to protect.

Ultimately, we have seen both scenarios come true in the real world. Switzerland has been forming a reputation for being a crypto-friendly nation. Two institutions focused on providing banking services for crypto clients have been granted licenses by the Swiss Financial Markets Supervisory Authority — undoubtedly a major milestone. The positive attitude toward digital assets undoubtedly contributed to Facebook’s decision to base its not-for-profit Libra Association there. And figures indicate that the country’s blockchain industry is reaping the rewards associated with this “open for business” approach — with a report suggesting that the value of Switzerland’s top 50 blockchain companies doubled to a collective $41 billion in the first half of 2019.

Then we have the other side of the coin. The United States has been especially tough with its crypto regulation, slamming the brakes on Libra for fear it could undermine the dollar and even threaten the global economy. Some politicians have practically been pulling their hair out at this stance, warning that stymying innovation could see countries with more nefarious means get a foothold in this burgeoning industry.

You also have countries like India that have threatened to impose strict laws on those who deal in cryptocurrencies — potentially resulting in punishments as severe as a 10-year jail term. Such a hardline stance, especially combined with the fact that crypto businesses have been effectively cut off from banking services, has resulted in a number of exchanges closing. There have also been warnings that India could suffer a “brain drain” as talented developers and entrepreneurs take their skills elsewhere, potentially meaning the economy loses out on billions of dollars in revenue. To add insult to injury, the government has been dragging its heels on enforcing the law — and it wasn’t introduced to parliament in the winter session, prolonging uncertainty.

So, what are the pros and cons of crypto regulation? Will it ever be possible for this fledgling industry to sit comfortably alongside traditional financial institutions? And given the fragmented landscape, with some countries embracing digital currencies and others shunning them, will this technology ever go global?

Crypto regulation: The pros and cons

Known crypto advocates have been exceptionally wary of any prospect of crypto regulation. Take a look at the Apple co-founder Steve Wozniak, who has warned that most countries will want to assert as much control as possible to preserve revenue streams. Others worry it could have huge ramifications for two of crypto’s unique selling points: transparency and anonymity. Then there’s the argument that Bitcoin and the cryptos that followed are intended to be decentralized — fully divorced from the financial infrastructure that caused a devastating recession back in 2007 — and bringing crypto into the fold would eliminate some of the freedoms that made it so appealing in the first place.

Regulating crypto and blockchain startups could also transform the way investments are carried out. For all of their flaws, initial coin offerings enabled crypto users of all budgets to contribute to the projects they’re passionate about — and treating future fundraising drives in a similar fashion to securities risks shutting these investors out in favor of higher net-worth individuals. There’s a risk that laws and frameworks would also struggle to keep up with the breakneck speed of the crypto and blockchain industry, conjuring up similar scenarios to those seen with the likes of Google and Facebook as the internet started to gain prominence. In a similar vein, many in the crypto world are worried that they would end up being regulated by officials who simply don’t understand the technology underpinning it.

Not everyone agrees that regulation needs to be calamitous for blockchain and crypto. Again, referencing initial coin offerings, some argue that the introduction of stringent regulations has the opportunity to introduce some vital investor protections that those on the stock markets take for granted. Regulation could also deliver the much-needed seal of approval that has been holding many institutions from taking the plunge — injecting billions of dollars’ worth of capital into the industry and driving regulation forward. Ensuring that crypto startups meet the same standards as companies going through initial public offerings could also increase the quality of new projects. However, this wouldn’t be without cost. Initial coin offerings, initial exchange offerings and security token offerings often take place with speed and efficiency — and stringent regulations and disclosure measures would inevitably slow things down.

There’s also the oft-quoted issue of crypto scams. The industry has been around for more than a decade now, and yet it has still been struggling to shake off the issue of fraudulent ventures that continue to cost vulnerable investors millions of dollars. Some argue that the fact these incidents are continuing to happen with such frequency serves as proof that the crypto world needs experience to gain legitimacy. On the other hand, others say self-regulation is the solution — an opportunity to create checks and balances by getting crypto businesses to mark each other’s homework and ensure that everything remains above board.

What lies ahead for crypto regulation?

With so many diverging opinions, and so much uncertainty over where the crypto and blockchain industry will be from a regulatory standpoint in the coming years, intelligence from prominent exchange executives, central banks, governing bodies and investors can be invaluable when it comes to assessing the mood music.

The Crypto Finance Conference says its aim is to provide light in the darkness, acting as a lighthouse in the choppy waters of the industry’s regulatory standing. Experts are on hand to answer personal questions, and a plethora of networking opportunities are provided so attendees can forge meaningful contacts and delve into areas of personal interest in greater depth.

Held in the Swiss Alps resort of St. Moritz from Jan. 15 to 17, 2020, there are already several sessions on the agenda that tackle the issue of crypto regulation head on. There’s an overview of regulatory and infrastructure development on Wednesday, alongside an insight into the approach that central banks are taking toward national digital currencies and tales from the global regulatory frontline. Thursday delivers a deep dive into Switzerland’s ecosystem, the international challenges associated with banking in the world of blockchain and crypto.

The already substantive agenda is going to receive a further boost as additional sessions are announced in the coming weeks. For the sharpest analysis on what lies ahead on the bumpy road toward regulation, the Crypto Finance Conference is shaping up to be an essential fixture as the industry heads into a brand-new decade.

Learn more about  Crypto Finance Conference

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

The Pros and Cons of Social Trading: Is It a Good Idea for New Investors?

Social trading has the potential to introduce inexperienced consumers to the world of crypto. Here, we look at the pros and cons.

Navigating the world of cryptocurrencies can be nightmarish at the best of times. New coins and tokens are continually emerging, and volatility means that digital assets can be flying high one day and crashing the next.

Understanding how the industry works and where opportunities lie can take an exhaustive amount of effort — and it could be argued that the complicated nature of crypto dissuades many ordinary traders from getting involved.

“Social trading” is being touted as a potential solution. Through specialist crypto platforms, such as exchanges and wallets, inexperienced consumers have the potential to emulate the strategies of others. They can also gain access to insights and perspectives from seasoned traders, enabling them to understand why crypto assets may fluctuate in value — and the indicators that potentially offer clues to future movements.

But how do these tools work, and what are their upsides and downsides?

The pros of social trading

Crypto trading is a challenging beast. The markets are open 24 hours a day, seven days a week — meaning it takes a lot of energy and determination to stay on top of every development. For those who are less experienced, emotions can also get in the way of rational decisions, sometimes resulting in traders losing even more capital because they enter into positions erratically.

Social trading is being regarded as a potential antidote to this. When done right, it can mean that a cool-headed, savvy trader is making decisions on behalf of other investors. These traders are normally chosen based on the types of strategies they specialize in, as well as the returns they have generated in the past. To incentivize them to share their strategies, they’ll usually receive a commission of the profits that their followers generate.

Followers who pay close attention to these market moves, analyzing each trade and why it has taken place, have the potential to become better traders themselves in the future. It can be an invaluable tool for gaining confidence, and a front-row seat for finding out what works in crypto trading — and what doesn’t.

The cons of social trading

As with everything in life, there are some downsides that need to be accounted for. Some inexperienced crypto enthusiasts are simply overconfident when they get involved with social trading — and they believe that strong levels of past performance serve as a guarantee of future returns. The problem is that no matter how experienced the trader they’re following is, there is always a real risk that mistakes can be made — and a sudden downturn in the markets can take everyone by surprise.

Copying the trades of others or using automation tools should also never serve as substitutes for keeping a close eye on how positions are performing. Those who use these services always need to remember that their money is on the line and that entrusting decision-making to someone else carries a high amount of risk.

Getting in sync

Platforms such as Monnos are giving newer crypto users the chance to follow experienced traders through features such as Sync Strategy. Algorithms take into account a multitude of indicators to provide an impartial ranking on the performance of each strategist. Following a strategist means that any trading moves they make will be automatically mirrored in the user’s own account.

The company also says it offers an all-in-one crypto account — bringing together a multicurrency wallet, an exchange, the ability to copy other traders, as well as savings services. In the future, a debit card will follow that enables users to spend their crypto in everyday life.

Don’t forget: Although social trading features can be appealing, it is crucial to continue monitoring the markets and the strategies being used. Mindlessly copying the actions of other traders — even if they were successful in the past or have many followers — can end up being an extensive mistake.

Learn more about Monnos

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Crypto in Africa: Opportunities and Challenges, Explained

Many African consumers are fed up with the status quo of local currencies and existing payment platforms — and believe crypto could be the answer.

How can I find information on what’s next for Africa?

Specialist publications, such as Cointelegraph, can help, as well as conferences focused on digital currencies and blockchain.

The Crypto Finance Conference is one such event, which is taking place in St. Moritz, Switzerland, from Jan. 15 to 17, 2020. Organizers say that speakers are going to offer compelling insights into what lies ahead, as well as offer the time to answer questions from attendees.

Already, the program is full of sessions that will be of deep interest to anyone who is following Africa’s exciting journey. There will be tales from the regulatory frontline, an insight into how central banks are approaching the creation of national digital currencies, and a deep-dive into the challenges of banking in the world of blockchain and crypto.

The Crypto Finance Conference says its emphasis lies in ensuring that those attending the invite-only event in Switzerland have every opportunity to establish meaningful interactions through extensive networking sessions. The plush surroundings of a luxury ski resort in the Alps can only be described as a bonus.

Learn more about Crypto Finance Conference

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

What other hurdles lie ahead?

Aside from the regulatory headaches, crypto businesses may find it hard to gain traction on the continent.

Why will adoption be a challenge? Mainly because of the fact that it could be hard to get the word out about crypto’s potential, and some consumers may be put off for fear that it’s simply too technical to use on a daily basis. It’s also fair to say that BTC might not be the best currency to use for daily purchases for Africans who are moving away from their local fiat because it’s too volatile.

There is also a real risk that reliable access to the internet across the entire continent might be overestimated, especially considering that connectivity lags far behind other parts of the world. Plus, compelling crypto and blockchain projects that are tailored to the African market will depend on developers and entrepreneurs who can deliver it, which means training new talent and enticing expertise from around the world will be crucial in enhancing levels of mainstream adoption.

How are things looking in terms of regulation?

Many African countries aren’t happy about crypto’s arrival.

A handful of African countries have banned crypto altogether, including Morocco, Algeria, Libya, Zambia and Namibia. Others have created substantial amounts of uncertainty by failing to offer a clear stance, leaving consumers in a gray area.

South Africa has been somewhat of a bright spot on the continent, where regulators have expressed enthusiasm about crypto’s potential. Official bodies have actually been working in concert with crypto companies and financial institutions to find the best way forward.

This year, work has been underway to develop an intergovernmental cryptocurrency regulatory framework, but the report is yet to be released. Many crypto advocates continue to be buoyed by an upbeat position paper released by the South African Reserve Bank all the way back in 2014, in which it said: “Increasing merchant acceptance, integrating existing conventional payment instruments with decentralized convertible virtual currency, and promoting the advantages inherent in such systems. Thus, there is potential for real growth of Bitcoin in its current operational environment.”

What could crypto, as well as blockchain, solve?

Advocates say there are many issues beyond currency volatility where crypto and blockchain could make a difference.

Aside from remittances and currency volatility, financial inclusion is another hot-button topic in Africa. Research from the World Bank suggests that many of the world’s 1.7 billion unbanked are on the continent, while 2 in 3 adults in sub-Saharan Africa do not have access to a bank account.

In some ways, Africa is better prepared for a move to crypto than other continents. Mobile money has already been a key driver in reducing the numbers of unbanked adults, and the World Bank says the continent is home to all eight countries where more than 1 in 5 adults solely rely on a mobile-only account. Given how many consumers are already open to using this technology, crypto exchanges and wallets that offer fully functional apps for mobile users are set to benefit immensely.

Blockchain is also showing plenty of promise. As a recent Cointelegraph article explained, stakeholders in the region say distributed ledger technology will be instrumental in solving long-standing developmental issues and unlocking much-needed economic growth. Nigerian politicians believe that blockchain will drive the world’s fourth industrial revolution, and, for the first time, Africa has the opportunity to have a seat at the table. Fintech companies across the continent are growing substantially. Hotspots include Cape Town, where the number of startups being established has risen 23%, and Nairobi, where there has been a 28% rise.

There is also hope that blockchain technology can help bring around dramatic improvement to the infrastructure in Africa. In Nigeria, companies are working together to see whether blockchain can be implemented in a push to make the nation’s roads safer. The West African nation of Sierra Leone has been working on the development of a blockchain-based ID system for its citizens amid hopes it could enable financial institutions to verify identities and build credit histories in a way that wasn’t possible before. Uganda has also teamed up with a blockchain startup to clamp down on the supply of counterfeit drugs nationwide, with reports suggesting that up to 10% of prescriptions result in fake medicine.

Why is Africa so keen on cryptocurrencies?

The reasons behind its popularity are multi-faceted and fascinating.

Cross-border payments are a contributing factor, especially given how remittances are often sent from countries like South Africa to 15 other countries on the continent in what is known as the Southern African Development Community.

Unpredictability in local fiat currencies is another issue. This year, the South African rand returned to form as the world’s most volatile currency, prompting consumers to seek protection for their money.

Africans living in other countries on the continent have also been losing faith in their central banks. Just look at Zimbabwe, where levels of hyperinflation have been rife. Bitcoin has become so popular there that demand is dramatically outstripping supply, meaning BTC sometimes trades at a sizeable premium to prices in the rest of the world. Back in June, the country reinstated the Zimbabwean dollar after a 13-year absence, and simultaneously banned United States dollars, British pounds and other foreign currencies. Wary of shortages and instability that have blighted the economy in the past, Zimbabwe has become one of the continent's biggest crypto markets because some consumers believe the likes of Bitcoin and Ether (ETH) are more trustworthy.

Is crypto in Africa popular?

Increasingly so, and you could argue that parts of the continent are world-leading.

Back in April, Google Trends data revealed that Lagos in Nigeria has the world’s highest volume of online searches for Bitcoin (BTC). A lot of this is driven by frustration toward existing payment solutions, with the likes of PayPal actually barring Nigerians from receiving international money transfers because of the country’s reputation for fraud. Millions of innocent consumers are suffering as a result because they have no choice but to use alternatives which charge high fees. Some tout cryptocurrencies as a perfect solution, which enable enterprising Africans to receive payments as they form business connections around the world.

Surveys have also revealed that Africa, a hub for m-commerce, is a hotspot when it comes to owning crypto. About 5.5% of adult internet users worldwide own some form of digital currency, but three African nations lie above this average. According to Hootsuite’s 2019 Global Digital Yearbook, 10.7% of South Africans possess crypto — the highest of any country surveyed. Nigeria also makes the list at 7.8%, with Ghana at 7.3%.

Security Token Offerings: The Next Big Thing in Fintech

Security token offerings are beginning to provide stiff competition to IPOs. Could they become the norm?

For businesses about to embark on periods of rapid growth, access to capital is essential. That said, traditional methods of fundraising sometimes leave a lot to be desired. Initial public offerings can help boost the profile of fledgling brands, but they are often costly — with middlemen taking a sizeable cut out of the money generated.

Cryptocurrencies and blockchain have upended the status quo, removing intermediaries from a plethora of businesses that we all use every day. Their impact is also being felt in the private equity sector — with entrepreneurs getting an opportunity to connect with consumers directly in order to raise the funds they need to prosper, grow and deliver.

Security token offerings

Security token offerings — otherwise known as STOs for short — are beginning to provide some stiff competition to IPOs. Here, investors are given tokens in exchange for their contribution to a fundraising drive. These tokens are backed by real-world assets such as stocks, bonds or real estate — and they are regulated. Investors have legally binding rights, which can entitle them to ownership, voting entitlements or dividends.

There are already compelling examples of security token offerings being put to good use. As reported by Cointelegraph, a real estate investment firm called AssetBlock has partnered with a luxury hotel asset manager to tokenize $60 million of exclusive hotels — giving investors access to properties unavailable to the public. Meanwhile, an STO is in the works for a luxury residential development in the British city of Manchester — with at least $25 million in assets being tokenized on the Tezos blockchain. This is part of a wider plan to tokenize $640 million of real estate across the United Kingdom in the coming years.

STOs began to gain prominence as another model for fundraising crypto projects, initial coin offerings, began to fall away. ICOs had sustained criticism because of how they circumvented particular legal frameworks, and often failed to comply with regulations that are designed to protect consumers and businesses alike.

Launching an STO is a much more involved process for startups, but that said, it’s worth doing things properly. It is crucial that these investment contracts don’t fall afoul of securities law, and as a result, they may only be able to receive funds from investors who have successfully completed an accreditation process. When done right, it is possible to ensure that tokens are fully compliant with United States laws that date back all the way to the 1930s.

Although there are some parallels between IPOs and STOs, there are a few distinctions worth bearing in mind. IPOs relate to privately held companies that are seeking to become publicly owned — making a debut on the stock market. STOs are different because they involve shares in real-world assets being distributed on the blockchain. Sure, this will commonly be used to represent a stake in a company, but there are other exciting applications for tokenization that are worth exploring. Investors in this space could end up becoming the proud co-owner of a piece of artwork expected to appreciate in value in the future or of a prime piece of real estate.

A threat to IPOs?

Some analysts believe security tokens represent the future — a financial product that one day could supersede the old-fashioned way of doing things entirely. As well as enhancing the liquidity of assets — making them easier to buy and sell — proponents say there is an opportunity to deliver greater transparency and oversight to businesses, investors and regulators alike.

None of this is to say that a transition to a blockchain-based financial world will be easy. One of the biggest hurdles to mainstream adoption is a lack of understanding about what STOs are and what they can achieve. The baggage associated with ICOs is another challenge.

However, the battle is worth it. STOs make it easier for investors to monitor the performance of their portfolios and engage in thorough recordkeeping. Accountability lies in how many STOs are being ranked based on their viability — and such scrutiny can occasionally be difficult to find in the traditional finance hubs of London, Tokyo and New York. There’s also an irresistible opportunity to create new types of financial instruments.

Who is tokenizing assets through STOs?

Companies are now trying to educate businesses and investors about what STOs have to offer. One of them is CPI Technologies, which says it has a team dedicated to ensuring that projects are brought to market successfully. The blockchain growth promoter and business facilitator says its goal is to help businesses sell more of their products and services — all while reducing fees by 70% when compared with IPOs.

According to CPI Technologies, the STO landscape is constantly evolving — and this is why its specialists are devoted to providing up-to-date advice concerning the best opportunities as they emerge. This is coupled with in-depth market research so companies can develop a thorough understanding of the hopes, fears, pains and dreams of their target audience. Last but by no means least, a squad of engineers is tasked with making newly created platforms work well. Funding a new venture can be a stressful experience that is fraught with legal questions, and that’s why legal support is provided every step of the way. 

Overall, the company believes it offers a viable alternative for young companies that don’t wish to rely on venture capital — and those who want to bring their products and businesses to scale in a speedy and inexpensive fashion.

CPI’s digital asset platform enables founders to kickstart their projects by collecting funds from around the world, without the hassle of traditional fundraising.

The platform allows startups to turn almost anything into a digital asset — from tangible products and private or company assets to intangible assets such as technology, innovation, entertainment and even gastronomy.

Contributors gain incremental voting rights regarding business decisions, as well as distributed dividends based on the number of tokens they purchase. The more tokens, the bigger their share in the project’s success.

CPI Technologies was founded by Marvin Steinberg and Maximilian Schmidt — and according to the company’s website, their efforts to help aspiring blockchain startups reach their goals unlocked funding worth $300 million in 2016 and 2017 alone.

Learn more about CPI Technologies

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Can Crypto Platforms Help Loyalty Schemes in Shops Make a Comeback?

Consumers are increasingly being turned off by the loyalty schemes offered by major retailers. Can crypto-based platforms help turn this around?

Retailers have been offering loyalty schemes for decades — but ensuring they are attractive enough to generate repeat customers is easier said than done.

Bond’s Loyalty Report, which surveyed 55,000 consumers in 2019, exposed these challenges in a stark way. Although 73% of those polled said they were more likely to recommend a brand with a good loyalty program, personalization is proving crucial for keeping these shoppers engaged — and just 22% are very satisfied that the rewards they are offered are matched to their individual interests.

Overall, retail initiatives are failing to keep up with customer demand. Just 44% are very satisfied with the programs they use. There are recurring issues that even the biggest companies are failing to address. Sometimes, their schemes are simply too complicated for users to get their heads around, leaving them unsure about what the points they have accrued are actually worth. In other cases, shoppers abandon programs because the returns are disappointing. With hundreds and even thousands of brands offering their own cards and accounts, the process of registering for each one individually and remembering to use them all can be overwhelming. And, on top of all this, too many retailers are failing to reach their target market on smartphones — either through instant messaging, social media or custom-built apps.

This led professional services firm KPMG to release a report calling for loyalty schemes to be given a wide-reaching rethink. Almost two-fifths of consumers polled encountered a problem with a loyalty program they used over a six-month period. But here’s the thing: Businesses can hit a lucrative sweet spot if they get their proposition right. KPMG’s research also revealed that 2 in 3 shoppers end up making special trips to earn a reward on a compelling loyalty program — and better still, 3 in 5 shoppers would actually be prepared to pay a little more for goods and services if they had the chance to accrue points, discounts or free products.

Transforming the loyalty market

What’s the solution for giving consumers what they want and ensuring that loyalty programs are viable for businesses? Well, with crypto and blockchain already upending countless other industries, it seems inevitable that this one would be ripe for disruption too.

Digital tokens are beginning to gain momentum, attracting younger audiences who may not be interested or engaged with credit-card loyalty programs or frequent-flyer initiatives. Plus, given how many schemes in the fiat world offer rewards that end up expiring all of a sudden, cryptocurrencies have the benefit of being more permanent. Major players such as Rakuten are exploring this potential, developing a coin that loyal users could convert into cold, hard cash if they wanted to. Other brands are building platforms where customers are rewarded for frequent purchases with points that can be exchanged for Bitcoin.

Businesses are starting to get fed up with investing so much in offering loyalty schemes that end up inactive. Retailers and merchants are paying tens of billions of dollars a year to companies that provide the infrastructure for such initiatives — and research suggests that blockchain could slash these costs dramatically.

For many crypto-based loyalty scheme providers, it’s also about placing the power back in the hands of consumers. Attitudes are beginning to change. Back in the day, it used to be the case that points accrued from a coffee shop would have to be spent at that same chain. But now, multiple brands are coming together under one roof — enabling them to attract a wider audience and welcome shoppers through their doors who may not have made a purchase before.

“A token of discovery”

One company that’s making a foray into the crypto-focused loyalty market is MozoX, which bills itself as a “token of discovery.”

Although its concept is firmly rooted in the future, the company has taken a novel approach by blending the realms of e-commerce and brick-and-mortar retail. It is aiming to motivate shoppers to return to offline stores — driving footfall in malls. The platform’s vision is to entice the public by enabling them to receive MozoX tokens through airdrops established by participating retail outlets, malls and venues simply by visiting their offline locations or by making a purchase. Over time, these tokens can be accrued and redeemed against products and services at any of these venues — “giving shoppers choice, flexibility and convenience,” according to the company. 

MozoX says that its cryptocurrency will be easy to transfer and trade on major exchanges, storable in major wallets and purchasable using fiat currencies, including U.S., Hong Kong and Singapore dollars. The company estimates that the worldwide loyalty market is worth a cool $300 billion, with 91 million stores using loyalty schemes to some extent. Executives say they have already signed memorandums of understanding to roll out its technology in 90,000 stores over the next three years — potentially reaching 13 million shoppers — and that its app value proposition to merchants compared favorably to the likes of Facebook and Uber Eats because MozoX guarantees foot traffic.

Round one of an initial exchange offering is set to take place on the LAToken platform from Nov. 25 to Dec. 25, and MozoX tokens can be purchased using Bitcoin, Ether or Tether.

Learn more about MozoX

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

How Crypto and Blockchain Are Influencing Geopolitics

With the U.S. and China at ends, India clamping down on Bitcoin, and the U.K. pursuing Brexit, how will the crypto market influence geopolitics?

The world is a constantly changing place — and from an economic standpoint, things are dramatically shifting, too. Two major superpowers, the United States and China, are embroiled in a dramatic trade war where tit-for-tat tariffs have been placed on goods — breeding uncertainty for consumers and businesses alike and making everyday products more expensive. The United Kingdom is still embroiled in a messy divorce from the European Union, and Russia is ratcheting up tensions with its neighbors in the West.

All of this geopolitical drama has two effects. Firstly, it can wreak havoc on the markets, wiping billions of dollars off the value of major companies and affecting employment rates in the world’s economies. Secondly, it is prompting some enthusiasts to passionately advocate for crypto and blockchain taking a bigger role in the economy. They say it could help bring down borders, making international payments faster and less expensive, while encouraging trade between nations.

That said, crypto and blockchain are also creating new geopolitical challenges. North Korea has faced allegations that a sophisticated group of hackers are launching cyberattacks on major exchanges in neighboring South Korea and other parts of Asia. Millions of dollars have been lost, with each incident shaking consumer confidence to its core. India has also been resolute in its decision to push ahead with a crypto ban. This could have ramifications for the likes of Facebook, which is hoping to launch a stablecoin that would benefit the unbanked. The Libra project is also creating tensions around the world, with many countries — the U.S. and the EU among them — concerned that the cryptocurrency could undermine traditional payment infrastructure and overtake the dollar and the euro.

Regulating crypto

A major thing that’s holding cryptocurrency back is the disjointed, fragmented approach to regulation around the world. While some countries like India are taking a hardline approach by proposing jail terms for anyone found handling these coins and tokens, the likes of Japan and Canada have been far more laidback — encouraging innovation, enabling taxes to be paid using Bitcoin, and creating so-called “regulatory sandboxes” where new crypto products can be tested on a small portion of the population before being rolled out.

There is a real and pressing divide when it comes to the attitudes surrounding crypto and blockchain. In some countries, there is incredible caution surrounding this technology amid fears it could have a detrimental impact on vulnerable consumers. That said, there are politicians out there who are appalled by the negative attitude that’s being espoused towards the industry — people who believe in its potential and believe their country should be at the forefront of innovation.

In part, this desire for a pro-crypto stance lies in fears that certain countries may be getting a headstart on developing their own central bank digital currency, establishing early dominance. One such country is China — which is already set to embark on a rapid acceleration of blockchain usage at the behest of President Xi Jinping.

What of the future?

Reading the tea leaves to figure out what the future holds for crypto and blockchain is a challenge. Will China achieve dominance and launch a central bank digital currency? Will India be successful in its quest to ban cryptocurrency? Will Russia succeed in its quest to enable law enforcement to confiscate Bitcoin, and is this even possible?

With so many unknowns, conferences have gained popularity as a way of hearing valuable insights from some of the best-known practitioners in the crypto and blockchain industries. One of them is the Crypto Finance Conference, which is taking place from Jan. 15 to 17 in St. Moritz, Switzerland.

Organizers of the conference say that they are determined to cater each session to the individual needs of attendees. To that end, some of the event’s main speakers are going to be taking time to answer questions both onstage and offstage. Extensive networking opportunities are also on offer, giving delegates the chance to delve into areas of particular interest and establish meaningful contacts.

The program is still under development — but already, there are a series of sessions that will interest those who are keeping a close eye on geopolitical developments in the industry. The first day will explore the global impact of crypto and blockchain, and offer predictions for the future. There’s little doubt that the talk on the evolution of central banking will explore the attitudes that countries worldwide are adopting when it comes to everything from Bitcoin to Libra. Tales from the global regulatory frontline are also going to be shared.

With crypto and blockchain constantly hitting the headlines and battles being fought on many fronts, there’s going to be plenty to discuss as business visionaries descend on one of Switzerland’s finest resort towns.

Learn more about Crypto Finance Conference

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Tracking Bitcoin Transactions, Explained

Keeping track of your crypto transactions can be crucial for some much-needed peace of mind.

How can I be informed of what’s happening with my crypto transactions?

Some crypto exchanges are aiming to deliver full transparency to their users.

This attitude toward openness can be especially beneficial for users who are using Bitcoin and other cryptocurrencies for the first time.

HitBTC, which bills itself as one of the most advanced crypto exchanges on the market today, has created a System Monitor that delivers live statistics concerning incoming and outgoing transactions for each of the cryptocurrencies it supports. Processing times for the last 100 transactions are provided — detailing the slowest and fastest execution times as well as the average for the group. Information about maintenance operations also offers updates about any improvements being made to the platform that might briefly affect transactions.

Learn more about HitBTC

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Can Bitcoin transactions be cancelled?

This is a very common question, but the answer is no.

Blockchains are designed to be irreversible, and once a transaction has been committed to a network, control falls out of your hands.

This is why it is imperative to check, double-check and triple-check before you are sending crypto transactions of a high value to ensure that you haven’t made any typographical errors in the address. It’s also worth verifying that you’re sending the right amount of crypto.

Why do Bitcoin transactions take so long?

Scalability has long been an issue on the Bitcoin network.

For a transaction to be finalized, it usually has to be confirmed six times before it is sent over to the recipient. This, when coupled with the high levels of demand that was mentioned before, means that it can take anywhere from 10 minutes to a day for transactions to clear — or even longer in some circumstances.

Bitcoin’s scalability issue has been a long-running issue for many years. The network is only capable of processing approximately seven transactions per second, meaning it pales in comparison to payment behemoths such as Visa. Workarounds such as the Lightning Network, which adds another layer to the blockchain to deliver instantaneous payments with lower fees, have been introduced, but it’s fair to say that even these solutions haven’t had the levels of traction expected.

How do I avoid stuck transactions?

To begin with, it’s important to ensure that you’re paying sufficient fees.

Over the years, the number of transactions being executed over the Bitcoin network has continued to increase apace. This has meant that miners end up prioritizing transactions with higher fees, including these in their blocks first.

When a crypto transaction is sent with a lower fee, it can take hours, days and potentially weeks for it to be confirmed. Such long delays normally indicate that the transaction is continually being outbid, and miners have little incentive to get it cleared. As a result, it ends up languishing in a mempool, waiting longingly for a block to come along.

Crypto wallets — and some exchanges — have started to help users achieve the best chance of their transaction being verified the first time around. Some monitor network activity and enforce dynamic fees, meaning the charges attached to each transaction fluctuate based on how busy miners are. If you are in a rush, it is also possible to manually add a higher fee to boost your chances of a speedy execution. Conversely, if you’re not a rush, you can save money on fees and accept it might take a little longer for your funds to reach the recipient.

Are there any benefits to transaction trackers?

There are an extraordinary number of potential applications.

When you are using a crypto exchange, transaction trackers can help you to double-check whether their trading platform is operating normally, and how long a transaction may take to finalize. This can provide valuable information in advance of a payment being made, as long delays may mean you choose to rely on a different provider instead.

It is possible that relying on some of these trackers can help you to be better prepared from a tax perspective too, and easily assess how your crypto portfolio has been performing. In the dreaded scenario that crypto has been sent by mistake, you’ll also have the opportunity to find out which address received it. Unfortunately, however, this is by no means a guarantee that you’ll get it back.

How can I track Bitcoin transactions?

Through block explorers and dedicated services offered by some crypto exchanges.

Unlike banks, where it can be difficult to find out information about details about transactions that are currently being processed — as well as those that have been completed — the blockchain offers far greater levels of transparency.

Anyone can search for information based on particular Bitcoin addresses, block numbers and transaction hashes. This, when coupled with wallet explorers, means it becomes possible to draw connections between addresses and the wallets being used to hold Bitcoin.

Of course, this will prove exceptionally useful if you’re worried about whether your crypto has gone to the right destination — or are wondering whether the transaction has been verified. But it’s worth remembering that these tools are also practical for law enforcement agencies that are attempting to clamp down on BTC being used for illegal means.

Fraudulent Transactions in Crypto, Explained

Crypto worth billions upon billions of dollars has been lost to fraud. But what are the most common scams, and can they be stopped?

How can payment fraud be avoided?

Introducing better verification measures can go a long way to protecting consumers.

Amazon and eBay are often held up as good examples of how transactions should be handled in the wider economy. These sites often deliver impartial reviews based on the past activities of buyers and sellers, meaning it is easier for consumers to find someone reputable. Measures are also in place to protect both parties if a transaction doesn’t go to plan.

A multitrader marketplace called Kuverit is aiming to bring this to the crypto and fiat world alike. The company claims it is building the world’s first peer-to-peer platform that is designed to protect consumers from financial loss in fraudulent transactions, meaning they are guaranteed to get their money back. Through its infrastructure, users will be able to check the reputation of the person they are about to deal with, and view a baseline score that is partially calculated as a result of Know Your Customer checks.

Transactions of up to $5,000 in value can be guaranteed through the use of a guarantor, who is paid a fee to ensure that both sides receive their funds. Transactions that are larger than this are protected through so-called “co-op pools” where the risk is spread across multiple guarantors, a feature that is better suited for businesses and those who are making large deals. When something goes wrong, supporting evidence is provided to voters and auditors who look at the case and resolve the dispute. Niche protection pools also offer a financial shield for events that otherwise would have been uninsurable.

With trillions lost to fraud every year, Kuverit says its goal is to reduce customer anxiety, help establish trust within the community, and reduce the stress, uncertainty and apprehension that the crypto industry has been struggling to shake off in its quest for mainstream adoption.

Learn more about Kuverit

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

I’m worried — can I track my crypto transactions?

Once a payment is sent, transactions can be tracked and verified through the blockchain.

For example, through a network such as Bitcoin, you can search for a transaction ID to check on the progress of a payment. The details provided include the total amount of fees that are being paid to miners, and how many confirmations the transaction has currently received. In Bitcoin’s case, six confirmations are required before the crypto has safely made its way to its destination.

Many other major cryptocurrencies, such as Ethereum and Litecoin, have their own blockchains where transactions can be verified. Payments involving ERC-20 tokens, a common type of crypto, are also verified through the Ethereum blockchain.

Global governments are also beginning to take an interest in tracking cryptocurrency, too. As Cointelegraph reported back in August, 15 jurisdictions around the world — G-7 countries among them — want to collect and distribute personal data on individuals who complete such transactions. The objective is to stop crypto from being used for illegal activities, namely money laundering and terrorism financing. More detailed measures are expected to be unveiled in 2020.

Tell me more — what are the most common ways to be tricked?

Exchanges, businesses, wallets and people that aren’t what they say they are.

For example, there might be a crypto exchange that looks like it offers fantastic rates and low fees on the trading fees you use the most. But, once you have made a deposit, it could be almost impossible to withdraw your funds. Another risk is entrusting your assets with a platform that has inadequate security measures in place. Just look at Mt. Gox — an astounding 850,000 BTC was lost all the way back in 2014, and those who were left out of pocket are still fighting to be reunited with their funds. Due diligence is essential — and even positive reviews found on crypto forums and social networks should be taken with a grain of salt.

Ponzi schemes are particularly disastrous because the number of victims can grow exponentially. Investors in these scams are normally under pressure to recruit as many others as possible to ensure that their profits rise. Indeed, they may even get a few payments to begin with — meaning those being duped often fully believe that they have stumbled across a real business opportunity. Ponzi schemes usually collapse when the pool of new recruits runs dry.

Phony crypto wallets are another issue. Apps posing as official wallets for NEO, Tether and MetaMask have been uncovered on the Google Play Store before now — and alarmingly, it seems they had hundreds of installs. The apps often requested a user’s private key and wallet password, sensitive personal data that would subsequently be used by cybercriminals to steal even more money. Other malicious pieces of software have piggybacked on reputable crypto wallet brands like Trezor.

Then, there are fake mainstream news articles and “official” social media pages that aim to capture crypto consumers who may have very little experience of the market. We’ve seen fraudulent investment opportunities that have claimed to have the endorsement of A-listers such as Elon Musk, Kate Winslet and Richard Branson — with Dutch billionaire John De Mol going as far to sue Facebook after the public lost an estimated $1.9 million falling for crypto ads that featured his image.

Facebook has even been a target itself, with fake pages on its social networks claiming to be official entities for the upcoming Libra cryptocurrency. They offered the chance for consumers to supposedly buy the stablecoin at heavily discounted prices, even though they hadn’t been launched.

How does payment fraud happen?

Fraudsters are getting increasingly creative — meaning constant vigilance is essential to protect crypto.

Ghost platforms that mimic legitimate exchanges. Fake platforms that invent users in order to make their business seem real. Clones of addresses that at first glance seem identical to the places you usually send funds. Yes, there are lots of great opportunities to be found in the crypto world, but fraud is big business.

Although sham initial coin offerings are not as commonplace as they once were (this fundraising method fell out of fashion a couple of years ago), exit scams remain. Crypto is raised for a business that looks exceedingly promising — complete with boasts of high returns — but then, the company disappears without a trace. In hindsight, the warning signs are there: the white paper was plagiarized, half of the team were not identified, and tough questions from concerned investors went ignored.

Higher levels of scrutiny are necessary because it can be nearly impossible to verify someone’s identity — not to mention their reputation — in the crypto world. All of this is affecting consumer confidence, and the adoption of digital currencies in general. Just look at 2019’s Blockchain Usability Report from the Foundation for Interwallet Operability. It revealed that just 25% of crypto consumers were “very comfortable and confident” that their transactions would be completed as planned. The rest described being very nervous and worried, somewhat stressed, or merely cautiously optimistic about the payment.

What Role Should Central Banks Have Launching Stablecoins Like Libra?

Libra has gotten off to a spluttering start in the eyes of regulators. But could central banks swoop in and save the day?

Ever since the vision for a Libra stablecoin was unveiled in its white paper back in June, Facebook has suffered a startling backlash from countries around the world. Some American politicians have claimed the digital currency has the potential to be more dangerous than 9/11. Lawmakers over in Europe haven’t been too kind either, with Germany’s finance minister warning he is “very, very skeptical” about the project.

The main bone of contention with Libra has been the notion of a private company creating a currency designed to rival the likes of the dollar and the pound. Critics fear it would undermine national sovereignty and economic stability — and given how Facebook has been embroiled in scandals in the past, others question whether Mark Zuckerberg’s social network is fit and proper to hold such a responsibility.

Nonetheless, there’s one thing that few can deny: The march toward digital currencies is well and truly underway. Just look at the People’s Bank of China, which has been furiously researching and developing such a financial asset that it can call its own. Although officials in Beijing have said the elusive project has no definitive timetable, speculation has been rife that the digital currency aims to directly compete with Facebook by beating them to launch. This has led analysts to warn that resistance to Libra could cause the yuan-backed asset to achieve dominance in emerging economies, with some politicians urging the U.S. to lead from the front.

David Marcus, the head of Facebook’s Calibra wallet, insists the project is not in jeopardy despite the likes of PayPal, Visa, Mastercard, Stripe and eBay leaving the Libra Association. That said, reports have suggested that Facebook potentially oversold the extent to which regulators were on board with the project. But what do central banks think of stablecoins such as Libra, and could they play a prominent role in helping them launch and thrive?

Banking on support

As things stand right now, the biggest hurdle standing in the way of Libra and stablecoins like it is the fragmented regulatory landscape. While some central banks appear to be embracing such projects with open arms, others believe there are fatal legal and regulatory issues in the way.

Take a look at Mark Carney, the governor of the Bank of England. He has been surprisingly optimistic about Libra — and has even defended Facebook’s decision to pursue creating a new cryptocurrency. He believes the social network was inspired to act because of imperfections in the traditional financial system — shortcomings that mean remittances are expensive for foreign workers to send back home, and cross-border payments are unacceptably slow. However, Carney does believe that adequate levels of regulation, oversight and accountability are required — and such projects shouldn’t be allowed to launch until such protections are in place.

The Bank of England has gone some way to getting the ball rolling. A document recently issued by the United Kingdom’s central bank said Libra has the potential to become “a systematically important payment system” — and urged regulators to embrace terms of engagement to help support innovative platforms prior to launch.

So, promising noises from the U.K. on Libra. But just look at how this contrasts with attitudes in the European Union — the self-same trading bloc that Britain is looking to leave as soon as Oct. 31. France has been nothing short of resolute in its stance against the stablecoin, with Finance Minister Bruno Le Maire warning that Libra’s development cannot be authorized on European soil.

It doesn’t take a genius to figure out that such vastly different opinions about digital currencies, and new technologies in general, can be disastrous for the economy, for consumers, and for the businesses who are attempting to innovate. Unity, cohesion and consistency are going to be the secret ingredients for ensuring that stablecoins can be compliant and rolled out at scale — and scale is important because of how it helps reduce costs for hard-pressed end users.

Making connections

The best way to move forward, and to understand the nuances of the issues at hand, is to hear the perspectives of the brightest and best in the industry — establishing new connections and engaging in debates about the best ways to dismantle the hurdles that lie ahead.

Organizers at the Crypto Finance Conference say they are trying to achieve exactly this, delivering an exclusive crypto finance and blockchain conference for investors that enables meaningful connections to be established. Taking place in the Swiss resort of St. Moritz from Jan. 15–17, the event blends top-flight speakers with generous amounts of time to network and build new contacts.

The program is continuing to evolve, but already, discussions about the critical role for stablecoins in financial inclusion — as well as the evolution of central banking and tales from the frontline of global regulation — are on the agenda. With so many question marks looming over the future of ambitious projects such as Libra, it is events like these that could help to secure some much-needed answers.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

How to Manage — and Understand — Risk Tolerance in Crypto Investing

Do you understand your tolerance for risk? Being armed with this knowledge is essential — especially if you’re interested in crypto.

“Risk tolerance” is a buzzword that’s commonly bandied around in the investment world — and with very good reason.

Although the phrase “no pain, no gain” has some truth — and there will always be some risk associated with making investments — we all have different thresholds of pain to consider. While some will suffer sleepless nights after the value of their portfolio slides by 1%, others can happily grin and bear it following a 10% hit.

The art of risk tolerance involves understanding your emotional response to financial losses and considering your long-term goals. Whereas turbulence in an asset class might not matter all that much if you’re planning to invest for a few decades, it could prove disastrous if you were saving for a short-term goal, such as a house or a new car.

The crypto dimension

Things get even more complicated when crypto is thrown into the mix. Compared with other assets, digital currencies are susceptible to far more levels of volatility. Just take a look at 2017, when total market capitalization soared from $18 billion to more than $825 billion — an increase of almost 4,500%.

Of course, such extraordinary levels of growth aren’t sustainable. In 2018, the crypto market fell hard and fast — losing 80% of its value in eight months. This decline led to naysayers warning that Bitcoin (BTC) wouldn’t be around for long, not least because the crash was more severe than the one that burst the dot-com bubble in 2000.

This volatility has led to critics warning that cryptocurrencies are impractical for everyday purchases, let alone as investments. Others, like Mike Novogratz, the CEO and founder of Galaxy Digital, think differently. The crypto advocate has claimed it is “almost irresponsible” not to invest in Bitcoin — once telling CNN: “It's almost essential for every investor to have at least 1% to 2% of their portfolio in crypto.”

Novogratz’s sentiment has been echoed by the likes of Tim Enneking, the managing director of Digital Capital Management. He told Forbes that investors are fools if they don’t invest in crypto assets — but added the all-important caveat that they are fools if they invest too much. He also recommended a threshold of 2% for everyday investors, rising to 5% to 10% for enthusiasts. Enneking cautioned that anything beyond this “should be reserved for true experts and devotees.”

Such modest allocations to such a burgeoning asset class might seem surprising, but this is based on the significant health warning that those who invest in crypto should be prepared to lose everything. By devoting a small chunk of their capital to digital currencies, the rationale is that they will be well-positioned to enjoy any substantial price rises that happen in future — and, if their holdings head in the other direction, most of the portfolio will still remain standing.  

Individual concerning stability and preserving their wealth would avoid high-volatility investments, hence, those who participate in the cryptocurrency market are considered to be risk-takers. It is worth bearing in mind that volatility means different things to different people — and it can take time for markets to settle down. Taking the dot-com boom as an example, it’s fair to say online businesses had their fair share of turbulence before the stock markets began to calm down. As a result, it could be argued that it’ll just take a while for the crypto world to get settled. 

Factors in risk tolerance

So yes, there are some risks associated with holding cryptocurrency as an investment. But given its high volatility, the regulatory uncertainty that surrounds exchanges in some parts of the world, and the danger that hackers and cybercriminals pose, aspiring investors also need to consider their appetite for risk when it comes to unexpected events. Thinking objectively about how much money is being held in crypto — and asking yourself whether you could comfortably lose it — is a straightforward way of gauging risk tolerance.

It is also worth bearing in mind that there are some opportunities that can help reduce the risks associated with crypto trading. One such example is arbitrage. Calendar spread arbitrage is a common hedging practice that takes advantage of discrepancies in extrinsic value across two different expiration contracts of the same token, in order to make a risk-free profit. If Exchange A is selling Bitcoin at $10,200 and Exchange B is selling Bitcoin at $10,500, it could be possible to buy it from the cheaper platform and sell it instantly on the more expensive one, pocketing the difference.

Devoting yourself to researching this ever-changing market can also work wonders for your risk tolerance — both because you can develop an understanding of where risks lie in crypto investments, and the best ways of mitigating them.

OKEx says it aims to deliver as transparent a crypto exchange as possible. Earlier, it launched Futures & Perpetual Swap Market Data , ”the first-of-its-kind big data platform in the industry offering accurate, unbiased trading data for customers to understand the derivatives market.” Additionally, the company suggests a plethora of materials that can help investors find a strategy that’s right for them and manage risk. Thorough blog posts explore technical indicators, analyze why certain assets are underperforming, offer advice on how to hedge portfolios, and deliver tips on how investors can safeguard their holdings against theft.

Recent examples saw OKEx explore whether accepting a salary in crypto is a good idea, following on from New Zealand’s decision to legalize wage payments in digital currencies. Against a backdrop of thousands of retail outlets beginning to accept crypto, the blog noted that such innovation could protect employees against the threat of inflation and the potential financial impact that an economic downturn might bring.

As discussed, eliminating risk entirely when dealing in crypto is a big ask. Experts can barely agree on what causes Bitcoin prices to rise when it’s happening, let alone what’s going to happen in the future. However, by understanding your tolerance levels, thinking about where you want to be in the future, and arming yourself with the tools to spot opportunities and warning signs, it is possible to fashion a strategy that’s a perfect fit.

Learn more about OKEx

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Programming Languages Used in Blockchain, Explained

Programming languages are crucial for blockchain — for usability, security and durability.

And what does Ride run on?

Ride has been specifically designed for Waves — a leased proof-of-stake protocol.

Waves says its aim is to build an environment in which developers can program in chunks — all with a view to ensuring that the ecosystem of decentralized applications can move toward the Web 3.0, a new era relating to how internet users and apps interact online.

The company says this approach of easy-to-use building blocks results in greater levels of customization and also ensures that DApps will be compatible with other pieces of software in the future. This predictable approaching to coding can almost be compared with Lego — the bricks all work together — as opposed to other languages in which the components may not fit.

Waves offers extensive courses to help developers become acquainted with Ride — courses that are available in a multitude of languages. These resources are accompanied by grants for those who wish to build decentralized apps and code for the next generation of the internet.

Learn more about Waves

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Are there any new solutions?

Some new offerings are attempting to deliver languages that bring coding into the 21st century — fit for the blockchain age.

One of them is Ride, which bills itself as a straightforward, concise language that’s easy for humans to read. The benefit of this is how it can reduce the time and resources needed to bring blockchain solutions to market. The strongly typed, non-Turing-complete language is designed to help developers avoid common critical mistakes that can stop code from running effectively. It also runs on a protocol that delivers flat fees and no gas, ensuring that the costs associated with DApp operations are known in advance to prevent nasty surprises.

Why is picking the right programming language so important?

Because it can have a huge impact on a blockchain platform’s future success.

Security is obviously the main concern — not least because a vulnerability can have a fatal effect on confidence in a network. When selecting a programming language, this should be top of the list.

Given the fact that anyone can add to a blockchain and access the code, it’s also worth producing code — and building a network — that can withstand as many requests as users are willing to throw at it. If it’s unable to perform to the standard required, and buckles under the pressure because it’s not versatile enough, this could be disastrous for scalability and development in the future.

What are their downsides?

In many cases, the learning curve associated with these programming languages can be steep, to say the least.

Cpp has a fairly outdated syntax — that’s the spelling and grammar associated with the programming language — meaning it’s often difficult for developers to get their heads around. Python’s simplicity runs the risk of clipping a developer’s wings when they are hoping to build an ambitious, complex blockchain network. JavaScript lets the team down because it lacks a SHA256 hash function, while Solidity is a fairly new language that does not allow additional features to be added to smart contracts once they have been created.

What are the most common programming languages?

Cpp, Python, JavaScript and Solidity are some of the established players in the blockchain programming community.

Many of these languages have been around for a significant amount of time and are also used for nonblockchain purposes. Take Cpp. It was first conceived in 1985 and was the core language for the network that started it all: Bitcoin. Developers like Cpp because of how it delivers control over memory usage, enables multiple instructions to be executed at the same time, and because of how it has achieved maturity by being around for almost 35 years.

Python, born in the early 1990s, is favored because of its simple, minimalistic approach — and this means that bugs in code can be fixed relatively easily. JavaScript is a major player on the internet as a whole and delivers interactivity with slick user interfaces. The most popular language on Ethereum is Solidity — a language that drew inspiration from Cpp , Python and JavaScript to create an environment that’s geared toward blockchain developers.

First, what are programming languages for?

Aside from functionality, programming languages are essential in ensuring that blockchain networks and crypto infrastructure are secure.

Their role is simple: They enable computers to understand instructions. While there is some overlap in the programming languages used to develop conventional software and technology for blockchain platforms, the workflows and skills required to create a successful project are radically different.

Maintaining a public blockchain is by no means an easy task. The code created needs to be absolutely bulletproof — not least because security vulnerabilities can and have been exploited by hackers. This slows down the process substantially because developers need to make sure that every loophole is addressed.

Programming languages are instrumental in ensuring blockchain networks run smoothly and transactions are executed with precision. To achieve automation, smart contracts are often used. When predetermined conditions are met, code enables these agreements between parties to be executed automatically. The incentive here is that it eliminates middlemen — eradicating the need for lawyers or notaries. That said, it can take intensive levels of coding to get them right.

Other blockchain uses include the development of decentralized applications (DApps) and the execution of crowdfunding initiatives.

Crypto Scams: The Effect on Consumers and Legitimate Businesses

Fraud is a sad but undeniable part of the crypto world. But how do you fight it, identify it and stay attuned to the latest scams?

Although the crypto industry has long been touted as the solution to some of the longest-running issues in the global economy, there’s one problem it has been unable to shake off so far: fraud.

Scams have been in operation for centuries — from counterfeited versions of luxury products, to Ponzi schemes that have collapsed, leaving hard-working consumers out of pocket to the tune of billions of dollars. Unfortunately, the growth in awareness and demand for digital assets has seen sophisticated fraudsters turn their attention to duping those who may be inexperienced when shopping around for crypto.

Why are there so many crypto scams?

It’s an undeniable truth that the crypto world has become a hotbed for scams because of how con men have been allured by the prospect of anonymity once their crimes are complete. Inadequate security can turn platforms into sitting ducks for an audacious security breach that puts consumer funds at risk. Fraudsters have even been known to set up their own platforms — often promising extravagant returns — only to run away with the capital that has been invested. Some of these exchanges also offer rates that are simply too good to be true, and once a naïve crypto enthusiast has deposited their funds, it can be near impossible to withdraw it again.

Staying ahead of the game

To illustrate the scale of the problem, just look at this research reported on by Cointelegraph earlier this year. A CipherTrace study revealed that, from January to August 2019 alone, losses at the hands of cybercriminals had topped a whopping $4.3 billion — a mix of outright thefts, scams and funds being misappropriated.

Much of this was attributable to PlusToken, which Chinese officials allege is a pyramid scheme. It is believed that more than 100,000 users were affected, and the amount of money held by the sham company is in excess of $2.9 billion. It’s an insane sum that puts the ruse among some of the biggest scams of all time, let alone the crypto industry.

The PlusToken saga was an “exit scam” — a trend that appears to have been on the rise in recent years. This is when a business practically vanishes overnight, even though it appeared to be genuine at first. In a recent article for Cointelegraph, experts recommended trying to get as much primary information about a project as possible before signing on the dotted line — looking at their media engagement levels with reputable publications, verifying the partnerships they announce, and keeping an eye on the activity in the company’s blockchain wallets. Alarm bells to be aware of include an amateurish white paper that’s full of typographical errors and shoddy research, as well as unrealistic profit expectations, scant details about team members and a social media presence that’s been inflated by artificial likes.

The case of Blockchain Cuties Universe

Unfortunately, legitimate companies can end up getting caught in the crossfire of crypto scams — having a detrimental effect on their business and the customers they serve. Fraudsters notice a firm that is thriving and trusted by the community and attempt to ride off its coat tails.

Blockchain Cuties Universe, a crypto collectible game company, says it has fallen victim to such an incident. It alleges that a Russian high-yield investment program has been infringing on its copyright — using its graphical assets to scam gamers for fiat money. Adverts led to a near-identical version of the Blockchain Cuties Universe website, leading users to believe that the scammers were affiliated with the company — or worse, its official online presence.

A Cuties player managed to interact with the alleged scammers, known as Zooks Family, to find out what was going on. They inaccurately claimed that investing $200 in a digital pet could realize returns of 3.7% a day for 50 days — 185% over the course of the period. Given the fact that the purported fraud used imagery from a reputable website, it is possible that some people were duped into parting with their hard-earned cash, only to realize later on that they’d made a mistake.

The company says that, as a whole, the crypto community has been trying to clamp down on malicious activity that causes significant reputational damage to the entire industry. Although Blockchain Cuties Universe believes the crypto world has a chance to become a place free of scams, it says vigilance from firms and users alike is essential.

Vladimir Tomko, the CEO of Blockchain Cuties Universe, said: “We will do our best to protect our reputation and gaming community in general. Right now we are actively preparing all the necessary papers to take legal action. What I would like to highlight is that common sense and asking a lot of precise questions will always help you to spot a scammer. Make sure you know who you are dealing with. Stay decentralized, stay secure. With the help of our powerful community, I believe, we will emerge victorious.”

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Decentralized Finance, Explained

Decentralized finance is gaining momentum as a sector that could transform the economy. But what is it, and what are the challenges that lie ahead?

What is the Crypto Finance Conference?

The CFC bills itself as “the most exclusive blockchain investors’ confidence in the industry.”

Held on an invitation-only basis, just 200 attendees will be at the Crypto Finance Conference in St. Moritz from Jan. 15–17, 2020. According to the organizers, the rationale behind limiting the event’s size is ensuring that those present have the opportunity to establish meaningful connections.

Countless experts are on hand as keynote speakers — addressing topics that explore the strengths, weaknesses and opportunities for decentralized finance. Talks will explore the critical role for stablecoins in financial inclusion, an insight into how regulators are attempting to keep up with the pace of global innovation, and the expectations for DeFi in the coming years.

The CFC has hit the headlines before, with Reuters reporting that more than a dozen billionaires had headed to the “glitzy Swiss ski report” to meet with blockchain entrepreneurs. Such meetings of minds help real progress be made — furthering the cause of DeFi in a way that hasn’t been discussed before. For the conference organizers, the objective is clear: bringing together the industry experts with investors and creating unforgettable memories by offering long breaks so that high-quality contacts can be forged and deals can be struck.

Learn more about CFC

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

How can DeFi develop and grow?

Tackling regulatory hurdles is a vital step in helping decentralized finance thrive.

However, a big drawback in achieving consensus lies in how there are countless DeFi organizations that are working independently of one another, creating a fragmented market. And, to compound the problem, there are countless governments with conflicting attitudes toward crypto and blockchain in general. Some countries have banned digital currencies in their entirety, with the likes of India threatening to send those caught dealing in crypto to jail for 10 years.

Establishing contacts between DeFi platforms, unlocking new partnerships, and engaging in conversations with decision-makers who can help this technology reach the masses, is nothing short of vital if crypto and blockchain are going to become a compelling alternative to the status quo. Major players in the traditional financial world regularly meet to discuss economic affairs — just look at the World Economic Forum in Davos — and the bright minds aggressive pushing DeFi forward need an outlet to do the same.

What are the risks associated with DeFi?

There are some challenges that lie ahead for DeFi’s proliferation.

Even though it could transform the lives of millions of people, it’s an inescapable fact that DeFi solutions have failed to gain public awareness. Adoption in the crypto world has been modest to say the least — and according to a study published by the Cambridge Centre for Alternative Finance back in December 2018, there are just 25 million verified crypto users worldwide. When compared with the 1.7 billion unbanked people we were talking about before, it’s clear there’s a lot of work to be done.

It’s also worth remembering that even if DeFi applications manage to welcome hundreds of millions of people to its platforms, the public blockchains they rely on may lack the capacity to accommodate their demands. Visa claims it can process in excess of 24,000 transactions per second — dwarfing Bitcoin, which is capable of seven TPS, dramatically. Scalability concerns have also been a long-running thorn in the side of Ethereum, with its co-founder, Vitalik Buterin, recently admitting that the blockchain is almost full.

Volatility in cryptocurrencies is yet another concern — and even though stablecoins have been seeking to remedy this, the hurdle of regulatory compliance continues to loom large. Facebook unveiled ambitious plans to launch a stablecoin called Libra this year, but the social network has faced staunch resistance from American politicians, regulators and financial institutions. Lawmakers have expressed concern that it could undermine the U.S. dollar and throw the global economy into disarray, while banks fear it could create a “shadow banking” system.

Why is DeFi starting to make noise now?

Technology is more affordable, meaning a higher proportion of the population have access to the tools needed to benefit from DeFi.

As of January 2019, 57% of the world’s population now uses the internet on a regular basis. Although there is much more work to do, compare that number with 2013, when it was just 35%. In addition to this, smartphones are starting to become considerably less expensive, meaning they’re more affordable for the planet’s poorest. Indeed, recent research from the World Bank suggests that two-thirds of unbanked citizens now own a mobile device — the selfsame technology they need to begin exploring DeFi platforms.

Public blockchains are also beginning to become more sophisticated, and inventive DApps are being unveiled all the time. Many of them have been built on the Ethereum blockchain.

How can decentralized finance be applied?

Advocates say DeFi has the potential to transform the lives of the world’s unbanked — and make life more affordable for everyone else.

Let’s take a look at the remittances market, in which foreign workers send billions of dollars across borders to their loved ones back home every year. The fees they face for doing this are often extortionate — eating into their modest income. DeFi services have the potential to slash these costs by more than 50%. Not only does this offer an incentive for an employee to earn more and be more productive, but it will also help support small businesses and economies on the other side of the world.

Loans are another pain point that can be addressed thanks to DeFi. Right now, it can be near impossible for the unbanked to borrow money, often because they lack credit records and history with a banking institution. DeFi platforms connect borrowers and lenders directly, eliminate credit checks, and enable digital assets to be collateralized.

Other forms of decentralized finance include stablecoins, a type of digital currency that shields consumers against the volatility of crypto by being pegged to another asset such as dollars or gold. Tokenization means real-world assets such as art, property and commodities can be owned and traded on blockchain, while decentralized exchanges mean users hold on to their funds at all times — reducing the risk of cyberattacks, a scourge that many centralized platforms have been struggling to shake off.

I’ve never heard of this before. What is it?

Decentralized finance (known as DeFi, for short) essentially involves a brand-new monetary system being built on public blockchains.

You may know Bitcoin and Ethereum as cryptocurrencies, but in fact they are vast, open-source networks that allow anyone to create applications that enable financial activity to take place without the involvement of centralized institutions.

The motivation behind this is simple: There are an estimated 1.7 billion people who currently lack access to financial services. Although existing infrastructure has been instrumental in generating wealth, very little has ended up going to this excluded population.

Decentralization means that there isn’t a single point of failure, as identical records are kept across thousands of computers through a peer-to-peer network. Because it’s permissionless, it is also open to anyone — irrespective of their wealth or where they live. And, whereas a bank or a payment processing company can close the account of an unsavory customer, blockchains are censorship resistant.

At the beating heart of the drive toward DeFi are decentralized applications, also called DApps. These plug-and-play tools make it easy for anyone with a smartphone to access financial services at lower costs.

Scalability on Blockchain: Is There a Solution?

Scalability: It’s the one thing that could derail crypto’s ambitions to go mainstream. Is there an answer to this long-running issue?

It’s one of the biggest challenges facing blockchain and crypto — a hurdle only the industry can solve. Without a solution, even CEOs from major global exchanges fear that mass adoption will never be achievable.

Scalability is the long-running thorn in the side of this fledgling technology, which is still relatively young and has yet to make meaningful inroads into the world’s economy. At a basic level, this relates to whether a blockchain network is capable of providing the same fast, high-quality experience to all of its users — irrespective of how many are online at any given time.

Consumers and corporations need to know that they can rely on a network whenever they need to use it, and getting this right before a platform goes live is crucial. In 2018, a PwC survey of 600 executives revealed that a whopping 84% of organizations are actively involved with blockchain — either at the research and development stages, piloting the technology, or with a live product.

A bad experience at any point of this journey could be nothing short of calamitous. Companies licking their wounds after a blockchain investment failed to meet their expectations would be reluctant to put the technology to the test again. Consumers frustrated by slow transaction speeds would see no incentive to switch from existing tools that have a far greater foothold in the market.

One of the biggest challenges concerning scalability is that it can be difficult to reach consensus on how to address it. Bitcoin (BTC), the world’s dominant cryptocurrency, has been down this road before. Even by 2017, the network was beginning to buckle under the strain of user demand — and as a result, fees to send BTC increased unless users were willing to wait for days for transactions to be settled.

While one group of crypto advocates wanted to address the issue by increasing block size limits — increasing scalability on-chain — another believed exponential scaling off-chain was a better approach. This has led to innovations such as the Lightning Network, an extra layer designed to deliver faster payments and low fees. At least in BTC’s case, this seems to be the direction of travel. Before this extra layer came along, the Bitcoin network could only handle seven transactions per second (TPS) — but the Lightning Network could theoretically deliver an upgrade of 10,000 TPS, along with lower fees and instantaneous settlement. You may think that this would prove to be the silver bullet to the perennial scalability issue, but a low rate of use has actually meant that operating nodes are losing money when transactions are processed. This has led to claims that BTC is facing an existential crisis, not least because the solution that was meant to save the day may not be justified.

Where e-commerce comes in

Naturally, seven transactions per second isn’t going to cut it for the fast-paced e-commerce sector. In the real world, it’s almost like running a cafe that has just five tables, yet every day there are 200 customers waiting for a seat. Often-quoted figures from Visa, the payment processing giant, claim that it is able to process in excess of 24,000 transactions per second. Despite the fees that merchants face when using this company’s infrastructure, it’s difficult to see why many of them would turn away from a well-established system that’s been embraced by customers for something that can handle 3,400 times fewer transactions a second. That would be like going from a bustling coffee shop with tables to spare to a kiosk where no one had room to sit.

That isn’t to say that these problems are fatal — far from it. Some businesses have been integrating crypto into their platforms despite the scalability woes, and have started to accept digital currencies as a payment method. The motivations for doing so vary. While some are tempted by the notion of attracting new customers by giving them a chance to use an asset that isn’t accepted anywhere else, others are keen for transactions to be settled faster — eliminating the agonizing, sometimes days-long wait to get funds in their business account. Others are simply fed up with the rigmarole of handling cash, not to mention the fees they have to pay when relying on financial institutions that dominate the market.

The business case for crypto

Crypto-focused companies such as ABBC are trying to get ahead of the curve by offering a blockchain platform that’s tailored to merchants and their customers, delivering a seamless experience for using digital currencies when shopping online. According to the firm, old networks increasing block sizes or boosting the frequency of block generation simply isn’t going to cut it — not least because it could throw up new security vulnerabilities and major issues with forks.

ABBC says it has acknowledged that the crypto sector needs to offer the same quality — if not better quality — than the fiat channels that enable instant payments to be made. To this end, it uses a consensus protocol known as delegated proof-of-stake, or DPoS for short. This method of validating transactions is built upon a system of reputation and real-time voting, with delegates placed squarely in charge of accepting or refusing network transactions.

The company estimates that it can handle up to 5,000 transactions per second — a capacity it claims “will only increase in time” and would make it “one of the fastest blockchains in the world.” This scalability is complemented by a multicurrency digital asset wallet that boasts “top-level security” and instant messaging, a shopping mall where crypto enthusiasts can access dozens of major brands in one place, and an exchange that delivers low transaction fees, high throughput performance and an abundance of liquid trading pairs.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Economic Turmoil: The Chances and Challenges for Blockchain and Crypto

Fears of recession. Political uncertainty. Hyperinflation. What are the chances and challenges for crypto and blockchain during the current economic turmoil?

Everywhere you look these days, there’s turbulence in the economy. A bitter trade war is seeing the United States and China slap ever-increasing tariffs on goods on a tit-for-tat basis. Over in the United Kingdom, never-ending uncertainty shrouds Brexit, with politicians in Westminster and Brussels at an impasse over the country’s imminent departure from the European Union. 

A shock election result in Argentina caused the peso to crash, while hyperinflation in Zimbabwe and Venezuela means everyday essentials are dramatically rising in price on a daily basis. On top of all that, protests continue in Hong Kong amid concerns about interference from the Chinese mainland.

And this is just a snapshot of what’s happening in the global economy at the moment. It’s little wonder that fears of a recession are growing. The services sector represents 80% of gross domestic product in the U.K., and at the start of September, a closely watched survey suggested growth had slowed to a crawl in July. Given that Britain’s economy contracted in the second quarter, another three months of decline would officially signal that a downturn has begun. Stateside, investors were spooked by an inverted yield curve, where short-term Treasury bonds yield more than long-term bonds. This indicator has successfully predicted every U.S. recession for almost 60 years.

Here’s the question: With the global economy in such disarray, is there an opportunity for cryptocurrencies and blockchain to save the day? In this article, we’re going to look at the chances and challenges facing the industry right now — as well as how this technology is already making an impact.

Crypto and blockchain: The chances

First, let’s take a look at the positives for crypto and blockchain — for, after years in the wilderness, some central banks are beginning to explore how the sector can enhance their economies. Back in August, the U.S. Federal Reserve unveiled plans to release a real-time payments and settlements service that would enable funds to be transferred quickly and around the clock, including weekends. Ripple Labs was also elected to the central bank’s Faster Payments Task Force Steering Committee — a milestone that shows financial institutions are in listening mode.

There have also been positive murmurings from organizations that have, until now, been skeptical about crypto’s potential. The European Central Bank (ECB) has barely hidden its cynicism about the industry in the past, maintaining that Bitcoin (BTC) is not a real currency and crypto doesn’t factor into the real economy. But in a sign that a changing of the guard could result in softening attitudes, the nominee to be the next ECB president — Christine Lagarde, the current head of the International Monetary Fund — has said central banks should be open to cryptocurrencies and the wider social benefits they could bring.

Elsewhere, there is increasing evidence that BTC has been relied on as a safe haven during times of economic turmoil. Financial analysts have maintained that retail investors are relying on the dominant cryptocurrency as a hedge against the turbulence caused by the U.S.-China trade war — prompting some to describe Bitcoin as “digital gold.” Telling evidence of this came in the middle of August, as BTC prices tumbled by more than 7% when tensions between the two economic superpowers appeared to ease.

This sentiment has also been spreading from retailers to everyday consumers. The political uncertainty in Hong Kong has seen some protesters turn to cryptocurrency so they don’t leave a trail of payments for the government to investigate. A spike in demand there led to locals paying a premium of about $300 per Bitcoin when compared with exchanges elsewhere. Premiums of $420 were seen when Mauricio Macri suffered a shocking defeat in Argentina’s presidential elections. And in Venezuela, records for Bitcoin trading volumes are continuously being broken because of its weakening national currency.

Crypto and blockchain: The challenges

As with most things in life, there are always two sides to the story. Focusing on the positives for crypto and blockchain would be neglecting some very real and pressing challenges facing the industry — challenges that extend beyond scalability and security. It has been well-documented that many blockchain networks struggle to compete with the capacity of traditional financial giants, and it is undeniable that repeated hacks have dented consumer confidence and stymied mainstream adoption. Although it is incumbent on the industry to find solutions to these very real problems, there are other issues that lie firmly out of their control.

Critics argue that fragmentation — the current existence of thousands of competing cryptocurrencies and countless blockchains — means the industry struggles to work in unison and speak with a single voice. This has been coupled with a disjointed approach to regulation, with nations around the world taking contradictory stances on crypto’s legality, meaning startups are free to operate in some jurisdictions but banned in others. Whereas a new coin might be welcomed with open arms in Japan, the simple act of owning crypto in India could potentially result in jail time.

Mainstream companies are also wading into the world of crypto. While this can be regarded as an opportunity to build public awareness, this brings its own threats. Since Facebook unveiled its white paper for Libra back in June, the reaction from many U.S. politicians has been one of alarm. While some fear a stablecoin spearheaded by a tech giant could undermine the dollar and wreck the global economy, others have gone further — claiming it could be more of a danger to America than the 9/11 attacks. Back in the crypto world, there are also fears that Libra could undermine BTC and altcoins, ultimately undermining the censorship-free, decentralized world that Satoshi Nakamoto envisioned — a world where the value of an asset wasn’t tied to the fate of the U.S. dollar.

Forging a path for the future

These are just some of the chances and challenges that need to be explored and debated if cryptocurrency and blockchain are going to continue gaining traction in the global economy.

The CFC St. Moritz says its conference is designed to offer exactly this: a place where the brightest minds can come together to discuss and forge a way forward. Strictly by invitation only, the event aims to pave the way for the valuable transfer of knowledge between participants — enabling private and institutional investors, as well as family offices and funds, to meet leading experts in the crypto and blockchain universe and discuss the topics mentioned above. Ultimately, the vision is to transfer knowledge by personal interactions between experts and investors, and allow every participant to build a “real” network — creating unforgettable memories, priceless contacts and the space to pursue new opportunities.

Just 200 to 250 people are going to be invited to the next conference, which is set to take place from Jan. 15–17, 2020 at Suvretta House St. Moritz in Switzerland.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Cash, Card or Crypto? — Platform Helps Stores Accept Digital Payments

A mobile crypto payment platform says its technology is removing the hurdles that are preventing online and offline retailers from accepting digital currencies.

A mobile crypto payment platform says its technology is transforming the retail business — and giving merchants an unprecedented opportunity to accept digital currencies as a method of payment.

Eligma says Elipay, its flagship product, removes the hurdles that have been stopping brick-and-mortar stores from embracing cryptocurrencies. All too often, independent retailers have been dissuaded from accepting the likes of Bitcoin because it would take too much technical know-how. Volatility has been another concern, with small shops fearful that sudden price fluctuations could erase their razor-thin profit margins.

However, the Slovenian startup says crypto can offer a much-needed alternative to the status quo — and stop physical stores from being left behind as online merchants give their shoppers a greater choice of payment methods. According to Eligma, its point-of-sale solutions mean merchants no longer have to pay the sky-high fees charged by payment processing companies. Better still, it offers a viable alternative when national currencies are left unusable because of high inflation.

Through Elipay, merchants can accept Bitcoin Cash, Bitcoin, Ether and ELI tokens (its native currency) via a platform that can be simply integrated into their existing infrastructure. Settlements occur immediately — and the company claims its technology eliminates the delays seen when credit card payments are being cleared. To address concerns over volatility, businesses that accept digital currencies can opt to receive revenue in their local currency, meaning no in-depth crypto knowledge is required.

Taking crypto mainstream

Eligma says its Elipay point-of-sale solutions are designed to make it possible for merchants of all sizes to accept crypto, wherever they are based — in store or on the road. For example, it offers a free system that enables transactions to be completed in offline locations via a mobile phone — perfect for market stall traders. Online retailers can also benefit from the company’s offering, as Elipay can be integrated into e-commerce stores with ease.

Elipay is available here

The payment platform now has its eyes on international expansion after making inroads in Europe. Elipay is now accepted at more than 370 locations — with Eligma claiming that this means that its home country, Slovenia, has the highest number of crypto-friendly physical stores in the world. The company has also played an instrumental role in creating Bitcoin City — a shopping mall where numerous major stores welcome digital currencies as a form of payment. According to Eligma, this novel concept has led to a rise in “crypto tourism,” with enthusiasts traveling from around the world for the experience.

Elipay has now started to be accepted in Croatia, and Eligma hopes to take its solution global by introducing Bitcoin Cities in nations around the world. Clusters of merchants in specific locations will be invited to start using the technology, creating hubs where crypto consumers can shop — safe in the confidence that their digital currencies can be used to complete a purchase.

New partnerships

Thanks to the momentum it has achieved as increasing numbers of retailers turn to Elipay, Eligma recently entered into a partnership with Bitcoin.com. This milestone has meant that Elipay locations are now able to accept the Bitcoin.com Wallet, which is used by an estimated 4 million people internationally.

Eligma has also been listening to customer feedback regarding the stores that they would like to see added to the platform. Back in June, this resulted in Elipay being accepted at Tuš, one of Slovenia’s biggest grocery store chains. The move means that crypto users can pay for fresh fruit, vegetables and 20,000 other items with ease at the supermarket’s self-service checkouts.

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